Dan, a professional basketball player, is to receive a bonus of $2 million for signing an employment contract. An NQDC plan is established to postpone the income beyond Dan's peak income years. In 2018, his employer transfers the bonus to an escrow agent, who then invests the funds in mutual funds. The funds are subject to the claims of the employer's creditors. The bonus is deferred for 10 years and becomes payable gradually in years 11 through 15. When is the bonus taxable to Dan and deductible by the employer?