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Deferred Compensation: Dramatic Changes
The recent issuance of Revenue Ruling 2002-22, 2002-19 I.R.B. 849 dramatically changes how income tax principles will be applied to the marital division of deferred or incentive compensation arrangements, and, potentially, to other types of assets, the gain from which is taxable as ordinary income. Stock options and contractual deferred compensation arrangements have become a standard form of compensation for corporate employees. In the marital dissolution law of practically every state where marital rights to these compensation arrangements have been examined, the value represented by these rights has been determined to be marital property, subject to division at divorce to the extent earned before divorce. Indeed, deferred compensation rights may be the most valuable marital asset, so negotiation and litigation over division of this value has become a fertile area for marital settlements.
The income tax consequences of dividing compensation assets pose significant problems and require careful attention to ensure that each spouse will receive the economic value of his or her share. Now, with Revenue Ruling 2002-22, issued by the IRS last May, matrimonial practitioners must familiarize themselves with another wrinkle in the equation.
New York's Latest Cybersecurity Commitment
On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.
Law Firms are Reducing Redundant Real Estate by Bringing Support Services Back to the Office
A trend analysis of the benefits and challenges of bringing back administrative, word processing and billing services to law offices.
Bit Parts
Summary Judgment Denied Defendant in Declaratory Action by Producer of To Kill a Mockingbird Broadway Play Seeking Amateur Theatrical Rights
Risks of “Baseball Arbitration” in Resolving Real Estate Disputes
“Baseball arbitration” refers to the process used in Major League Baseball in which if an eligible player's representative and the club ownership cannot reach a compensation agreement through negotiation, each party enters a final submission and during a formal hearing each side — player and management — presents its case and then the designated panel of arbitrators chooses one of the salary bids with no other result being allowed. This method has become increasingly popular even beyond the sport of baseball.