- 33 -
In the absence of any language in the controlling statutory
provisions suggesting a disqualifying disposition of stock will
cause the related option to be treated as something other than an
ISO, we reject petitioners’ argument on this point. We sustain
respondent’s interpretation and application of the $100,000 limit
imposed under section 422(d) in this case.
V. Whether Petitioners May Reduce Their AMTI in 2000 by AMT
Capital Losses Realized in 2001
Capital Losses Under Regular Tax and Alternative Minimum Tax
Sales of securities generally are subject to the capital
gain and loss provisions. Section 165(f) provides that capital
losses are permitted only to the extent allowed in sections 1211
and 1212.
Under section 1212(b), a noncorporate taxpayer is required
to offset capital losses against capital gains for a particular
taxable year. If aggregate capital losses exceed aggregate
capital gains for a taxable year, up to $3,000 of the excess may
be deducted against ordinary income.13 Sec. 1212(b). A
noncorporate taxpayer may carry forward unrecognized capital
losses to subsequent taxable years, but it does not allow such
13 For married individuals filing separately, $3,000 is
reduced to $1,500. Sec. 1211(b)(1). If the excess of capital
losses over capital gains is less than $3,000 (or $1,500), then
only that excess may be deducted. Sec. 1211(b)(2).
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