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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