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stock option if the employee had attempted to sell the shares of
stock within a year of exercising his stock option.
Robinson is distinguishable from the instant case on its
facts. Petitioner was not subject to a sellback provision that
required him to return the shares of stock to InsWeb in the event
he attempted to sell the stock before January 18, 2000.
For a taxpayer to be allowed to defer recognition of income,
section 83(a) requires that shares of stock be both
nontransferable and subject to a substantial risk of forfeiture.
Petitioner was not prohibited from pledging his shares of InsWeb
common stock as collateral. This may be taken as an indicium
that petitioner’s shares of InsWeb common stock, upon receipt,
were transferable within the meaning of section 1.83-3(d), Income
Tax Regs. See Tanner v. Commissioner, 117 T.C. 237, 242 (2001),
affd. 65 Fed. Appx. 508 (5th Cir. 2003).
Caselaw establishes that a restriction on the
transferability of property does not affect the timing of income
inclusion or the amount of income required to be included under
section 83 if the property is not subject to a substantial risk
of forfeiture. See Pledger v. Commissioner, 71 T.C. 618 (1979),
affd. 641 F.2d 287 (5th Cir. 1981); Sakol v. Commissioner, 67
T.C. 986 (1977), affd. 574 F.2d 694 (2d Cir. 1978); Koss v.
Commissioner, T.C. Memo. 1989-330, affd. without published
opinion 908 F.2d 962 (3d Cir. 1990).
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