Keith D. Hilen - Page 11

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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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