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The question we must ask, then, is whether the two
transactions in this case were “part and parcel of one”. Wener
v. Commissioner, 24 T.C. 529, 532 (1955), affd. 242 F.2d 938
(9th Cir. 1957). If so, then the gain or loss in the subsequent
year must take its character from the transaction in the earlier
year. See Bresler v. Commissioner, 65 T.C. at 187; Arrowsmith
v. Commissioner, 344 U.S. 6, 8 (1952).
We addressed an analogous situation in Slater v.
Commissioner, 64 T.C. 571 (1975), and concluded that the
relation-back doctrine did not apply. In Slater the taxpayer
was granted an option to purchase restricted shares of his
employer’s stock. The taxpayer exercised his option in June
1968 and, when the restrictions lapsed in July 1969, recognized
the difference between the stock’s exercise price and its fair
market value as ordinary income. The following year, in
December 1970, the shares were sold at a loss. The taxpayer
attempted to argue that, under the relation-back doctrine, the
loss should be characterized as an ordinary loss by reference to
the character of the gain that had been recognized when the
restrictions lapsed. The taxpayer argued that because he had
received the options as part of his employment, the loss on the
shares should relate back to his employment.
We rejected the taxpayer’s argument, finding instead that
no relationship existed between the taxpayer’s employment and
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