- 2 -
the stock was selling for on the date the option was
exercised.
Held: Sec. 83(c)(3), I.R.C., is inapplicable
because the 6-month restricted period under sec. 16(b)
of the Securities Exchange Act of 1934 commenced on the
date of grant of the option and expired by the date of
exercise.
Held, further, for purposes of sec. 83(c)(3),
I.R.C., the 6-month period provided by sec. 16(b) of
the Securities Exchange Act of 1934 cannot be extended.
Held, further, upon the exercise of his option, P
realized income in the amount of the difference between
the fair market value of the shares received over the
amount paid as the exercise price. Sec. 83(a), I.R.C.
Held, further, the assessment of a deficiency is
not barred by the statute of limitations because there
was a substantial omission of income. Sec. 6501(e),
I.R.C.
Claude R. Wilson, Jr., for petitioners.
Audrey M. Morris, for respondent.
VASQUEZ, Judge: Respondent determined a deficiency of
$286,659 in petitioners’ 1994 Federal income tax. On their 1994
tax return, petitioners reported income from wages of $161,067.
The issues for decision are: (1) Whether petitioners had
unreported income of $728,000 in 1994 from the exercise of an
employee nonstatutory stock option; and (2) whether respondent
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011