Compensation Planning
Deferred Compensation Arrangements (385)
Portfolio Description
Tax Management Portfolio, Deferred Compensation Arrangements, No. 385-4th, analyzes the federal income and employment tax treatment of nonqualified deferred compensation arrangements. Both funded and unfunded plans for taxable employers are addressed as well as eligible and ineligible deferred compensation plans of tax-exempt organizations and state and local governments. The Portfolio describes employment contracts, agreements, plans, and other arrangements under which the payment of a portion of the compensation for services currently performed by one or more employees is deferred until a later date. The tax consequences to both the employee and the employer of unfunded promises to pay deferred compensation are discussed along with the tax consequences of providing an employee with a vested right in a trust or annuity contract. Nonvested beneficial interests in trusts and annuity contracts are also addressed. The Portfolio additionally compares the results of nonqualified deferred compensation arrangements with those applicable to qualified plans, statutory stock options, nonqualified stock options, and restricted stock plans. Finally, accounting and securities issues are discussed.
Tax Management Portfolios on related matters include 383 T.M., Nonstatutory Stock Options, and 384 T.M., Restricted Property-Section 83.
The Worksheets contain relevant practitioner aids, including examples of deferred compensation arrangements.
This Portfolio may be cited as Brisendine, Veal & Drigotas, 385-4th T.M., Deferred Compensation Arrangements.
A. Thomas Brisendine, Director (retired), Employee Benefits Tax, Washington National Tax Office, Deloitte Tax LLP; B.A., J.D., Emory University.
E. Thomas Veal, Director, Employee Benefits Tax, Washington National Tax Office, Deloitte Tax LLP; B.A., Yale; J.D., University of Illinois .
Elizabeth Drigotas, Principal, Employee Benefits Tax, Washington National Tax Office, Deloitte Tax LLP; A.B., Bowdoin College; J.D., University of North Carolina at Chapel Hill.
The authors would like to gratefully acknowledge the invaluable assistance of Diane McGowan, Thomas Pevarnik, Brian Shew and Laura Edwards in the researching, drafting, reviewing and editing of this Portfolio. Without their Herculean efforts, completion of this Portfolio would have been impossible.
