- 15 -
of forfeiture.15 See Tanner v. Commissioner, 117 T.C. 237, 242
(2001), affd. 65 Fed. Appx. 508 (5th Cir. 2003); sec. 1.83-7(a),
Income Tax Regs.
Petitioner argues he continued his employment with i2 in an
advisory capacity through October 2000. In support of his
argument, petitioner testified that, when he expressed his desire
to leave i2, he was pressured by i2’s president, Mr. Brady, to
remain with the company until a replacement could be found.
After December 31, 1999, his primary role was to assist in
finding a replacement and to a lesser extent, assist with
business development, media and analyst relations, and
establishing a new venture company. As compensation for
remaining with i2, he would receive his full 1999 bonus and
permission to exercise his stock options without restriction.
15 Section 83(a) may apply to a nonqualified stock option
as follows:
If there is granted to an employee or independent
contractor * * * in connection with the performance of
services, an option to which section 421 * * * does not
apply, section 83(a) shall apply to such grant if the
option has a readily ascertainable fair market value *
* * at the time the option is granted. * * * . If
section 83(a) does not apply to the grant of such an
option because the option does not have a readily
ascertainable fair market value at the time of grant,
sections 83(a) and 83(b) shall apply at the time the
option is exercised or otherwise disposed of, even
though the fair market value of such option may have
become readily ascertainable before such time. * * *
[Sec. 1.83-7(a), Income Tax Regs.]
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