127 T.C. No. 9
UNITED STATES TAX COURT
JONATHAN N. AND KIMBERLY A. PALAHNUK, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12015-05. Filed October 11, 2006.
In 2000, P acquired stock through his exercise of
an incentive stock option (ISO) within the meaning of
sec. 422(b), I.R.C. P realized no income or loss on
the exercise for purposes of computing Ps’ 2000 taxable
income but realized $2,086,009 of income for purposes
of computing Ps’ 2000 alternative minimum taxable
income (AMTI). In 2001, P sold the stock and realized
on the sale a regular tax capital gain of $148,461 and
an alternative minimum tax (AMT) capital loss of
$1,937,547. During 2001, P also realized $153,625 of
capital losses unrelated to any ISO. Ps calculated
their 2001 taxable income by including $3,000 of their
regular tax capital loss resulting from all of the
sales. Ps argue that they may calculate their 2001
AMTI by reducing their 2001 taxable income by the
$2,086,009 difference (as rounded) between the $148,461
regular tax capital gain and $1,937,547 AMT capital
loss attributable to the stock related to the ISO. Ps
argue alternatively that their 2001 AMTI is calculated
by reducing their 2001 taxable income by the $151,461
Page: 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011