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Discount Stock Options As Deferred Compensation
Recent legislation has heralded a dramatic shift in the United States federal income tax treatment of nonqualified deferred compensation arrangements. One of the potentially more far-reaching aspects of the legislation is its effect on individuals who receive certain non-statutory stock options for their services. This article focuses on the circumstances under which the Act treats compensatory stock op-tions as nonqualified deferred compensation for federal income tax purposes, the consequences of such treatment, and the resulting practical considerations in dealing with the treatment of certain stock options as nonqualified deferred compensation.
Background
In October 2004, President Bush signed into law the American Jobs Creation Act (the Act). The Act added new Section 409A to the Internal Revenue Code of 1986 (the Code) generally effective for amounts deferred after Dec. 31, 2004. Concerned about “the popular use of deferred compensation arrangements by executives to defer current taxation of substantial amounts of income,” Congress enacted Code Section 409A to narrow the circumstances under which executives could effectively defer the recognition of taxable compensation. In doing so, however, Congress cast an extremely wide net. Section 409A draws no distinction between executives and lower echelon employees and it defines the targeted class of “nonqualified deferred compensation plans” in the broadest possible terms subject to a very limited list of exceptions. As a result, certain compensatory non-statutory stock option arrangements are now subject to the Code Section 409A regime, with possibly disastrous tax results to the option holders.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?