This article discusses various strategies for deferring
tax which would otherwise result from the DOI Income.
the effective date for one full year to fiscal years beginning after December 15, 1989.
A "like-kind exchange," when done in compliance with Section 1031 of the Internal Revenue Code, is a method of deferring
some or all of the capital gain taxes on the sale of an investment asset by buying a similar replacement asset within a specific time period.
These plans provide many opportunities for employers, not only for deferring
or reducing FICA taxes, but also by creating ways to benefit certain classes of employees without the strict discrimination rules of qualified pension plans.
The instructions further state: Nonqualified plans include those arrangements traditionally viewed as deferring
the receipt of current compensation.
Elective deferral plans involve deferring
some portion of salary or other form of compensation, based on a deferred amount plus an interest factor, elected before the income is earned and fully vested and payable in the event of pre-retirement termination of employment for virtually any reason.
In addition, the Company has concluded that its historical practice of accruing the cost of providing a one-year warranty free of charge for certain product sales rather than deferring
a portion of the revenue as would generally be required for postcontract customer support was incorrect.
Although it may not have any effect on the financial statements for the current year, accelerating deductions or deferring
income may result in additional carryback potential in future years.
In electing this approach, however, Investor foregoes the time-value-of-money benefit of deferring