Share
Explore BrainMass

Income Tax: Qualified Deferred Compensation Plan

Questions to be answered are:

1) What are the four basic requirements for a plan to qualify under section 401(a) of the I.R.C.?

(2) What is meant by the term 'qualified deferred compensation' for income tax purposes, and for whom is it most often used?

(3) At what time is the employer allowed to take a deduction for its contribution to a qualified deferred compensation plan?

Solution Preview

Hello Student,

In order to answer question number one, your first need to give a brief introduction as to what the Internal Revenue Code is. You may state that:

"The Internal Revenue Code is a set of comprehensive federal tax laws created by the Internal Revenue Service. It ...

Solution Summary

This solution first gives a brief overview of the Internal Revenue Code. It then states the four basic requirements for a plan to qualify under section 401(a) of the I.R.C as Pension Sharing, Profit Sharing or Bonus. Information and links to information is then provided with how to answer - what is meant by the term 'qualified deferred compensation' for income tax purposes, and for whom is it most often used and also, at what time is the employer allowed to take a deduction for its contribution to a qualified deferred compensation plan.

$2.19