Which of the Following Statements Concerning Nonqualified Deferred Compensation Plans

Multiple Choice

Which of the following statements concerning nonqualified deferred compensation plans is true?

A) These plans can be an important tax planning tool for employers if they expect their marginal tax rate to decrease over time.
B) These plans can be an important tax planning tool for employees who expect their marginal tax rate to increase over time.
C) Distributions are taxed at the same tax rate as long-term capital gains.
D) If an employer doesn't have the funds to pay the employee, the employee becomes an unsecured creditor of the employer.