Income for tax purposes is defined in the broadest possible terms. §61 states it as “income from whatever source derived.”[1] The case law adds further clarification and detail. Glenshaw Glass defined income as “undeniable accessions to wealth, clearly defined, and over which the taxpayers have complete dominion.”[2] The latter term is central to a properly structured non-qualified deferred compensation (NQDC) plan. If the taxpayer has any control over the plan’s income, he will have to include the total income in his annual income.
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