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USC Title 26 enacted through 2008

§ 457A. Nonqualified deferred compensation from certain tax indifferent parties

In general
Any compensation which is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be includible in gross income when there is no substantial risk of forfeiture of the rights to such compensation.
Nonqualified entity
For purposes of this section, the term "nonqualified entity" means -
any foreign corporation unless substantially all of its income is -
effectively connected with the conduct of a trade or business in the United States, or
subject to a comprehensive foreign income tax, and
any partnership unless substantially all of its income is allocated to persons other than -
foreign persons with respect to whom such income is not subject to a comprehensive foreign income tax, and
organizations which are exempt from tax under this title.
Determinability of amounts of compensation
In general
If the amount of any compensation is not determinable at the time that such compensation is otherwise includible in gross income under subsection (a) -
such amount shall be so includible in gross income when determinable, and
the tax imposed under this chapter for the taxable year in which such compensation is includible in gross income shall be increased by the sum of -
the amount of interest determined under paragraph (2), and
an amount equal to 20 percent of the amount of such compensation.
For purposes of paragraph (1)(B)(i), the interest determined under this paragraph for any taxable year is the amount of interest at the underpayment rate under section 6621 plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not subject to a substantial risk of forfeiture.
Other definitions and special rules
For purposes of this section -
Substantial risk of forfeiture
In general
The rights of a person to compensation shall be treated as subject to a substantial risk of forfeiture only if such person's rights to such compensation are conditioned upon the future performance of substantial services by any individual.
Exception for compensation based on gain recognized on an investment asset
In general
To the extent provided in regulations prescribed by the Secretary, if compensation is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition.
Investment asset
For purposes of clause (i), the term "investment asset" means any single asset (other than an investment fund or similar entity) -
acquired directly by an investment fund or similar entity,
with respect to which such entity does not (nor does any person related to such entity) participate in the active management of such asset (or if such asset is an interest in an entity, in the active management of the activities of such entity), and
substantially all of any gain on the disposition of which (other than such deferred compensation) is allocated to investors in such entity.
Coordination with special rule
Paragraph (3)(B) shall not apply to any compensation to which clause (i) applies.
Comprehensive foreign income tax
The term "comprehensive foreign income tax" means, with respect to any foreign person, the income tax of a foreign country if -
such person is eligible for the benefits of a comprehensive income tax treaty between such foreign country and the United States, or
such person demonstrates to the satisfaction of the Secretary that such foreign country has a comprehensive income tax.
Nonqualified deferred compensation plan
In general
The term "nonqualified deferred compensation plan" has the meaning given such term under section 409A(d), except that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.
Compensation shall not be treated as deferred for purposes of this section if the service provider receives payment of such compensation not later than 12 months after the end of the taxable year of the service recipient during which the right to the payment of such compensation is no longer subject to a substantial risk of forfeiture.
Exception for certain compensation with respect to effectively connected income
In the case[FN 1] a foreign corporation with income which is taxable under section 882, this section shall not apply to compensation which, had such compensation had[FN 2] been paid in cash on the date that such compensation ceased to be subject to a substantial risk of forfeiture, would have been deductible by such foreign corporation against such income.
So in original. Probably should be followed by "of".
So in original. The word "had" probably should not appear.
Application of rules
Rules similar to the rules of paragraphs (5) and (6) of section 409A(d) shall apply.
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations disregarding a substantial risk of forfeiture in cases where necessary to carry out the purposes of this section.

Tax Code (Internal Revenue Code) Section Index

U.S. GAAP by Codification Topic
105 GAAP Hierarchy
105 GAAP History

205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory

340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments

505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock

605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements

805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview

820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option

830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest

840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions

855 Subsequent Events
860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156

985-20 Costs of software to be sold

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Accounting Topics
Tax Code (Internal Revenue Code) Section Index

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