Under IRC Section 457A  certain offshore and other entities are limited in their ability to provide tax-effective deferred compensation to providers of services to those entities. In Revenue Ruling 2014-18 (the “Ruling”), the “IRS confirmed that certain equity-based compensation arrangements are not subject to Section 457A. The Ruling could lead to increased interest on the part of investment funds and their sponsors to explore the use of certain types of equity-based compensation arrangements.

via An Appreciation for Hedging Your Bets on Deferred Compensation: IRS Issues Revenue Ruling 2014-18 Under Section 457A of the Internal Revenue Code | Dechert LLP – JDSupra.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.