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OPINION
LARO, Judge: This case was submitted to the Court fully
stipulated. See Rule 122. Petitioner petitioned the Court to
redetermine respondent's determination of deficiencies of
$347,583 and $27,578 in its 1988 and 1989 Federal income taxes.
We must decide whether section 83(h) prevents petitioner from
currently deducting the value of stock that it transferred to its
employees in 1988 as compensation for services. We hold it
does.1 Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the subject years. Rule
references are to the Tax Court Rules of Practice and Procedure.
Background
All facts have been stipulated. The stipulations of fact
and the exhibits submitted therewith are incorporated herein by
this reference. Petitioner is an accrual method corporation
whose principal place of business was in Detroit, Michigan, when
it petitioned the Court. It was owned as follows during the
subject years:
1 The deficiency for 1989 results entirely from respondent's
determination that a research and development credit that
petitioner claimed for 1989, as a carryover from 1988, was usable
in full in 1988. We sustain respondent's determination for 1989
as a result of our holding on the deduction issue.
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