Which of the Following Statements Concerning Nonqualified Deferred Compensation Plans

question 21

Multiple Choice

Which of the following statements concerning nonqualified deferred compensation plans is true?

• A)If an employer doesn't have the funds to pay the employee when the payment is due, the employee becomes an unsecured creditor of the employer.
• B)These plans can be an important tax planning tool for employers if they expect their marginal tax rate to decrease over time.
• C)These plans can be an important tax planning tool for employees who expect their marginal tax rate to increase over time.
• D)Distributions are taxed at the same tax rate as long-term capital gains.

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Definitions:

Stopping Smoking

The process of discontinuing the use of tobacco, which is known to improve health outcomes and reduce the risk of developing smoking-related diseases.

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An increase in body weight due to the accumulation of fat, muscle mass, or other body constituents.

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A serious gum infection that damages the soft tissue and, without treatment, can destroy the bone that supports your teeth.

Sharpened Cognition

Improved mental acuity, including aspects such as memory, attention, and problem-solving abilities.