- 2 - Respondent determined a Federal income tax deficiency for petitioners’ 2000 taxable year in the amount of $4,575. The principal issue for decision is whether a $50,512 payment received by petitioner Samuel S. Lowe III (Mr. Lowe) under a long-term incentive plan constitutes ordinary income or capital gain. Background Some of the facts have been stipulated and are so found. The stipulations of the parties, with accompanying exhibits, are incorporated herein by this reference. At the time the petition was filed in this case, petitioners resided in Mary Esther, Florida. During 1998, Mr. Lowe was employed as an executive of UniversalCom, Inc. (UCI). In June of 1998, Mr. Lowe became a participant in the UniversalCom Inc. Key Executive Equity Appreciation Plan III, referred to as KEEAP II.2 The stated purpose of the plan was “To provide long term equity financial incentives for the key executives of UniversalCom, Inc. (UCI) while they create substantial economic value on behalf of the Company’s shareholders.” The plan documentation established a “Beginning Plan Equity Value” for UCI of $12,975,000 and provided for each key employee 2 The apparent discrepancy between the titles Key Executive Equity Appreciation Plan III and KEEAP II is not otherwise explained by the record.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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