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However, for AMT purposes, petitioner must include in his
AMTI the spread between the exercise price and the fair market
value of the shares of Exodus stock on the date of exercise. See
secs. 55(b)(2), 56(b)(3), 83(a). We find that petitioner must
include $1,066,064 in his AMTI for 2000.6 As a result,
petitioner’s adjusted AMT basis in the shares of Exodus stock is
increased by the amount recognized to $1,075,289.
Next, we consider whether petitioner may reduce his AMTI in
2000 as a result of the AMT capital loss realized in 2001.
B. Capital Losses Under Regular Tax and Alternative Minimum Tax
If securities which are capital assets (as defined by
section 1221) become worthless during a taxable year, any losses
resulting therefrom are treated as capital losses, as if a sale
or exchange of the securities occurred on the last day of that
taxable year. Sec. 165(g)(1). Section 165(f) provides that
capital losses are allowed only to the extent allowed in sections
1211 and 1212.
5(...continued)
his “regular tax basis” and to his basis for AMT purposes as his
“adjusted AMT basis”.
6 $1,075,289 (fair market value of petitioner’s shares of
exodus stock on 12/21/00) less $9,225 (total exercise price)
equals $1,066,064.
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