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Taxable Income to the Employee

An employee is currently in receipt of taxable income in which of the following circumstances?

  1. The employer makes an irrevocable, formally funded promise to pay the employee $300 per month for life, beginning at age 65, provided the employee does not terminate service prior to age 65.
  2. The employer makes an unsecured promise to pay the employer $500 per month beginning at age 65.
  3. The employee is given an irrevocable right to $10,000 per year at age 67 to be paid out of the corporation’s cash flow.
  4. The employer buys an ordinary life policy and assigns it irrevocably to the employee for the purpose of providing the employee $200 per month after age 65.