Robert J. Merlo - Page 6

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               On December 28, 2004, petitioner filed with the Court a                
          cross-motion for partial summary judgment in petitioner’s favor             
          that:  (1) Petitioner’s rights to shares of stock acquired during           
          2000 as a result of exercising an ISO were subject to a                     
          substantial risk of forfeiture; and (2) petitioner is entitled to           
          an ATNOL deduction under section 56(d).                                     
                                     Discussion                                       
               Summary judgment is intended to expedite litigation and                
          avoid unnecessary and expensive trials.  Fla. Peach Corp. v.                
          Commissioner, 90 T.C. 678, 681 (1988).  The Court may grant                 
          partial summary judgment when there are no genuine issues of                
          material fact and a decision may be rendered as a matter of law.            
          Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520             
          (1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v.                        
          Commissioner, 90 T.C. 753, 754 (1988).  We conclude that there is           
          no genuine issue of material fact as to whether petitioner’s                
          right to shares of Exodus stock was subject to a substantial risk           
          of forfeiture and that a decision may be rendered as a matter of            
          law.  We also conclude there is a material issue of fact as to              
          whether petitioner is entitled to an ATNOL deduction under                  
          section 56(d).                                                              
               Petitioner admits that petitioner’s stock option meets the             
          requirements of section 422 and qualifies as an ISO.  Under                 
          section 421(a), a taxpayer is allowed to defer regular tax on               






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