SubChapter-S, Deferred Compensation and Synthetic Equity

[TCWalker]

To spin on a prior post, I recall that in July 2003 The IRS release Temporary and Proposed Regulations 1.409(p)-1T under IRC §409(p), which seems to require looking at both stock and non-stock calculated deferred compensation plans of a Sub-S Corp. in the light of the synthetic equity and disqualified person rules of 409(p). I haven't seen much news on this subject in the last year, but unless the proposed regs. are modified, I suspect this is something of a show stopper in the Sub-S environment. If I recall correctly, distributions of deferred comp in Sub-S plans were required to occur in July 2004 for avoid the 409(p) rules.

Anyone dealt with this lately?