12 2 STA T .39 3 0PUBLIC LA W 110 – 3 4 3 —O CT. 3 , 200 8‘ ‘ (B)organiz a t ion swh i c har e e x e mp t f rom tax u n d er this tit l e . ‘‘(c) DET E RMINAB I L IT YOFA MO U NT S OF C OM P ENSATION. — ‘‘( 1 ) I N G ENERAL.—If the amount of an y compensation is not determina b le at the time that such compensation is other - wise includible in gross income under subsection (a)— ‘‘(A) such amount shall be so includible in gross income when determinable , and ‘‘(B) the tax imposed under this chapter for the taxable year in which such compensation is includible in gross income shall be increased by the sum of— ‘‘(i) the amount of interest determined under para- graph ( 2 ), and ‘‘(ii) an amount e q ualto2 0 percent of the amount of such compensation. ‘‘(2) INTEREST.— F or purposes of paragraph (1)(B)(i), the interest determined under this paragraph for any taxable year is the amount of interest at the underpayment rate under section 6 621 plus 1 percentage point on the underpayments that would ha v e occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such deferred compensation is not sub j ect to a substantial ris k of forfeiture. ‘‘(d) O T H ER DEFINITIONS AN DS PE C IAL R ULES.—For purposes of this section— ‘‘(1) SUBSTANTIAL RIS K OF FORFEITURE.— ‘‘(A) IN GENERAL.— T he rights of a person to compensa- tion shall be treated as subject to a substantial risk of forfeiture only if such person ’ s rights to such compensation are conditioned upon the future performance of substantial services by any individual. ‘‘(B) EX CEPTION FOR COMPENSATION BASED ON GAIN RECOGNI Z EDONANIN V ESTMENT ASSET.— ‘‘(i) IN GENERAL.—To the extent provided in regula- tions prescribed by the Secretary, if compensation is determined solely by reference to the amount of gain recognized on the disposition of an investment asset, such compensation shall be treated as subject to a substantial risk of forfeiture until the date of such disposition. ‘‘(ii) INVESTMENT ASSET.—For purposes of clause (i), the term ‘investment asset’ means any single asset (other than an investment fund or similar entity)— ‘‘(I) acquired directly by an investment fund or similar entity, ‘‘(II) with respect to which such entity does not (nor does any person related to such entity) participate in the active management of such asset (or if such asset is an interest in an entity, in the active management of the activities of such entity), and ‘‘(III) substantially all of any gain on the dis- position of which (other than such deferred com- pensation) is allocated to investors in such entity. Regulations.
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