457(f) and short-term deferral

[Ken Davis]

Do arrangements subject to 457(f) have available a short-term (2-1/2 month) deferral rule similar to the one available in 409A. For example, a 457(f) arrangement says the substantial risk of forfeiture lapses on December 31, 2012 and the payment of the deferred compensation will occur on January 2, 2013. Is the deferred compensation taxable under 457(f)(1)(A) in 2012 (no short-term deferral rule available) or 2013 (short-term deferral rule available)?

Thanks,

Ken

[jpod]

Nothing in 457(f), or the limited regulations and other guidance thereunder, suggests that there is such a rule. For now I would assume that there is no such rule. However, perhaps the proposed regulations which the IRS has been promising for 5 years will contain a S-T rule that takes S-T deferrals out of the definition of "deferred compensation" and therefore a S-T deferral would not be subject to 457(f) in the first place. Total speculation on my part.