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After concessions,2 the issues remaining for decision are:
1. Whether petitioner’s rights in shares of stock acquired
upon the exercise of incentive stock options (ISOs) in 2000 were
subject to a substantial risk of forfeiture within the meaning of
section 83(c)(3) and section 16(b) of the Securities Exchange Act
of 1934)3 (the Exchange Act). We hold petitioner’s rights were
not subject to a substantial risk of forfeiture.
2. Whether respondent properly determined that petitioner’s
options exceeded the $100,000 annual limit imposed on ISOs under
section 422(d). We hold respondent correctly applied section
422(d) in this case.
3. Whether petitioners may carry back capital losses to
reduce the amount of their alternative minimum taxable income for
2000. We hold they may not.
4. Whether petitioners may carry back alternative tax net
operating losses to reduce the amount of their alternative
minimum taxable income for 2000. We hold they may not.
5. Whether petitioners are liable for an accuracy-related
penalty under section 6662(b)(2) for 2000. We hold petitioners
2 The parties filed a stipulation of settled issues in
which they agreed to the amounts of deductions petitioners are
entitled to claim for charitable contributions made during 2000.
3 The Securities Exchange Act of 1934, ch. 404, sec. 16(b),
48 Stat. 896, codified at 15 U.S.C. sec. 78p(b) (2000). For
convenience, all citations are to sections of the Securities
Exchange Act of 1934.
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