Charitable gift of deferred compensation

[Guest Tomstone]

A participant in a voluntary nonqualified deferred compensation plan wishes to donate the accumulated balance of his deferral account to a charitable organization. He does not wish to receive or be taxed on the balance that is scheduled to be paid to him in a few years but instead wishes that it will be paid by his employer directly to the charity. Is there a way to accomplish this such that he both avoids income taxation on the payment and entitles him to an income tax deduction for the gift?

[Guest Harry O]

The employee would have income equal to the distribution and a deduction for the amount contributed to the charity. In most cases there won't be a dollar-for-dollar offset because the charitable deduction will be reduced for itemized deduction phase-outs, AGI limits, etc.

[mbozek]

If he defers the payment of deferred comp until death then there will be no income or estate taxation if the property is transferred to a charity because there is an unlimited deduction for charitable contributions under the estate tax.