LLC and Non-qualified deferred compensation plans

[Guest deedee]

Are employees of an LLC treated differently or are they restricted in some way regarding executive non-qualified deferred compensation plans? If the answer is yes, could you point to the relevant articles, letters, regulations, etc. Thank you.

[QDROphile]

Unless you are dealing with tax exempt member entities or member entities that have shareholders, the problem with nonqualified deferred compensation from LLCs is that you don't have chump shareholders to pay the taxes on the deferred compensation during the deferral period. The tax burden flows through to the members, including the member(s) who are getting the deferred compansation. Members usually don't like that and are greedy and informed enough to understand, eventually.