S 1416

This bill, the Reduction of Excess Business Holding Accrual Act, changes how the federal government taxes private foundations that own large stakes in corporations. Specifically, it aims to clarify the treatment of stock repurchased by a corporation from an employee stock ownership plan (ESOP). The bill treats stock purchased from an ESOP as ‘outstanding’ voting stock for tax purposes, but with certain exceptions designed to prevent over-taxation of foundations, particularly those established before 1969. This change is intended to simplify the tax calculations for foundations holding stock acquired through ESOPs.