- 10 -
would not be paid pursuant to "plans" under section 404(b), they
would not be described in section 404(a)(5), and thus section
1.162-10(a), Income Tax Regs., would not apply, and petitioner
would be entitled to its deduction under section 83(h) and
section 1.83-6(a)(3), Income Tax Regs.
According to the regulations, if the benefits in question
were not "received" within the 2-1/2 month period, it is presumed
that the amounts would be deferred compensation, they would be
paid pursuant to "plans" under section 404(b), they would be
described in section 404(a)(5), and then section 1.162-10(a),
Income Tax Regs., would apply, sending us back to section
404(a)(5) for the deductibility of the amounts.
The parties have stipulated that the amounts specified in
the letter of credit were includable in the employees' gross
income under section 83 as of the date of transfer. Petitioner
maintains that since the amounts were vested, funded, and
includable within the 2-1/2 month period, they must have been
"received" within that period for purposes of section 1.404(b)-
1T, Temporary Income Tax Regs. Respondent contends that mere
includability in income is not enough, that "received" requires
that the employee must have been able to put the amount included
"in his pocket" for the 2-1/2 month "window" under the
9(...continued)
For an illuminating discussion of the correlation between 2-1/2
months and 75 days see Mansuss Realty Co. v. Commissioner, 143
F.2d 286 (2d Cir. 1944), affg. 1 T.C. 932 (1943).
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