-4-
On March 15, 2000, petitioner exercised petitioner’s ISO and
purchased some Metromedia shares at a total cost of $99,949. On
that date, the purchased shares had a total fair market value of
$2,185,958. Petitioner realized no income or loss on the
exercise for purposes of computing petitioners’ 2000 taxable
income but realized $2,086,009 of income for purposes of
computing petitioners’ 2000 AMTI.
In 2001, petitioner sold the Metromedia shares for $248,410
and realized a regular tax capital gain of $148,461 (shares’
selling price of $248,410, less the shares’ exercise cost of
$99,949) and (as rounded) a $1,937,547 AMT capital loss (shares’
selling price of $248,410, less the shares’ AMT adjusted basis of
$2,185,958).3 Unrelated to any ISO, petitioner during 2001 also
realized capital losses totaling $153,625.
On their 2001 return, petitioners included a $3,000 capital
loss in calculating their 2001 taxable income as $561,161 and
calculating their regular tax liability as $191,457. Although
petitioners were not subject to the AMT in 2001, they computed
their 2001 AMTI to ascertain the amount of the section 53 credit
for prior year minimum tax liability that they could claim in
3 A statement attached to petitioners’ 2001 return reports
that the selling price of the shares totaled $248,972 and that
the resulting gain was $149,024 ($248,972 - $99,948). While
petitioners acknowledge in their posttrial brief that the
resulting gain was $148,461, they do not explain this
discrepancy.
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011