Harold Levinson Associates, Inc. - Page 12

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               Second, section 83 does not apply to "the transfer of an               
          option without a readily ascertainable fair market value".  Sec.            
          83(e)(3).  Section 1.83-7(b), Income Tax Regs., provides that               
          where an option is not actively traded on an established market,            
          the option does not have a readily ascertainable fair market                
          value unless the taxpayer can demonstrate all of the following:             
               (i) The option is transferable by the optionee;                        
               (ii) The option is exercisable immediately in full by the              
               optionee;                                                              
               (iii) The option or the property subject to the option is              
               not subject to any restriction or condition * * * which has            
               a significant effect upon the fair market value of the                 
               option; and                                                            
               (iv) The fair market value of the option privilege is                  
               readily ascertainable in accordance with paragraph (b)(3) of           
               this section.                                                          

          The option in this case fails the first two conditions.  The                
          Option Agreement states that "The Options are not transferable              
          and are exercisable only by the Optionee, during his lifetime."             
          The option was also not exercisable immediately in full by                  
          Goldman.  The Option Agreement provides that the Optionees can              
          exercise the options for 60 days, but only "after the date on               
          which Company has become a New York Tax Stamp Agent".  In view of           
          petitioner's obvious failure to satisfy the first two conditions,           
          we need not even consider whether the third or fourth conditions            
          have been met.                                                              






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