From a Tax Perspective, Participating in a Nonqualified Deferred Compensation

question 22

True/False

From a tax perspective, participating in a nonqualified deferred compensation plan is an effective tax planning strategy when the employee anticipates that her marginal tax rate will be higher when she receives the deferred compensation than when she defers the compensation.

---

Definitions:

Transformation

The genetic alteration of a cell by the direct uptake and expression of DNA from its surroundings.

Oxidants

Chemical substances that have the ability to oxidize other substances, meaning they can accept electrons from another substance during a chemical reaction.

Primary Alcohol

An alcohol containing a hydroxyl group attached to a carbon with two hydrogens, indicating a primary carbon.

Aldehyde

An organic compound containing a carbonyl group (C=O) bonded to at least one hydrogen atom, with the general formula R-CHO.