1. Which of the following statements are correct regarding diversification requirements for participants in an ESOP?
a. Participants must be at lease 55 years old.
b. Participants must have been in the plan for more than 15 years.
c. Up to 50% of a participant’s ESOP balance can be diversified in the last year of the qualified election period.
d. Two of the above choices.
2. There are additional tax advantages, beyond mismatch of income and deduction, for the establishment of an ESOP. One of these is non-recognition of gain treatment. To obtain non-recognition of gain treatment, what percent of company stock must the ESOP own after the transaction?
a. 85%.
b. Over 50%.
c. 30%.
d. 25%.