SYNOPSIS: Individuals pay taxes not only on amounts actually received, but also on amounts they constructively receive, as well as the value of any economic benefit conferred upon them. This report provides an overview of how these principles of taxation are applied, particularly with regard to compensation deferral.
TAKE AWAYS: A fundamental understanding of the tax principles relating to constructive receipt and economic benefit will enable an advisor to better navigate the challenges of deferred compensation planning for his or her clients. PRIOR REPORTS: 12-32, 09-42, 09-12, 08-108, 07-44, 07-37, 04-135, 04-133.
MAJOR REFERENCES: IRC §409A, IRC §83, Treas. Reg. §1.415-2.
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