David is a participant in a nonqualified deferred compensation plan. In answering his questions about his plan, which one of the following would be a correct statement?

A)

If David takes out a lump sum at retirement, he may use five-year averaging to reduce the income tax burden.

B)

David's employer may deduct its contributions to the fund as they are made.

C)

In order for David to avoid being taxed on the money as it is set aside for him in the plan, the money must be subject to a substantial risk of forfeiture.

D)

If his employer files for bankruptcy prior to David receiving his benefits, he can take a capital loss deduction on his income taxes.