New Tax Rules Re Certain Investment Fund Managers' Deferred Compensation


On Friday, October 3, 2008, President Bush signed the Emergency Economic Stabilization Act of 2008 (the ?Act?) into law. Section 801 of the Act added new Section 457A (Nonqualified Deferred Compensation from Tax Indifferent Parties) to the Internal Revenue Code (the ?Code?). In general, new Code Section 457A provides that any compensation 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 right to receive such compensation. According to Alan Tawshunsky, deputy division counsel and deputy associate chief counsel (employee benefits) for the I.R.S. Office of Associate Chief Counsel (Tax-Exempt and Government Entities), this new rule is targeted at hedge funds and private equity funds, but is broad enough to affect other arrangements as well.[1]

See full update for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.