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gross income from the exercise of nonstatutory stock options in
1999.
Background
At the time of the filing of the petition in this case,
petitioner resided in Santa Rosa, California.
In May 1995, petitioner commenced work for Strategic
Concepts Corp. Strategic Concepts Corp. later changed its name
to InsWeb Corp. (InsWeb).
As part of his compensation package, petitioner received
grants of options to purchase InsWeb common stock. Each grant
gave petitioner the right to purchase a specified number of
InsWeb shares for a specified price per share at a future date.
To exercise his stock options, petitioner was required to notify
InsWeb in writing and make arrangements to pay InsWeb an amount
sufficient to cover the exercise price and any Federal, State,
and local taxes InsWeb was required to withhold from wages.
On November 15, 1998, petitioner’s employment with InsWeb
was terminated. However, petitioner entered into a consulting
relationship with InsWeb and was employed as a consultant under
his separation agreement from November 15, 1998, to September 30,
1999. Because petitioner’s employment was terminated, under the
terms of his option agreements the last day that he was able to
exercise his stock options was December 31, 1999.
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