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transaction is, in substance, similar to the grant of an option.
See id.
Next we consider whether the risk that the property will
decline in value has been transferred. Sec. 1.83-3(a)(2), Income
Tax Regs. The focus here should not be on whether the taxpayer
is personally liable, as petitioners suggest, but on whether the
risk was transferred from the employer. Facq v. Commissioner,
supra. When Allegiance transferred the shares, it no longer bore
the risk of a decline in value. The risk was borne by either
Mrs. Racine or CIBC. Which one bore the risk is irrelevant
because, regardless, Allegiance no longer had the risk because of
the transfer. Facq v. Commissioner, supra; Palahnuk v. United
States, supra. Accordingly, this factor weighs against finding
that the substance of the transaction was the same as the grant
of an option. Palahnuk v. United States, supra.
Finally, we consider the likelihood the purchase price will
be paid. Sec. 1.83-3(a)(2), Income Tax Regs. This factor
examines whether the purchase price for the property is paid, not
whether the indebtedness incurred to pay the purchase price will
be paid. Facq v. Commissioner, T.C. Memo. 2006-111; Facq v.
United States, 363 F. Supp. 2d 1288 (W.D. Wash. 2005); Hilen v.
Commissioner, supra; Miller v. United States, 345 F. Supp. 2d
1046 (N.D. Cal. 2004). Allegiance received the exercise price of
the shares (plus funds from Mrs. Racine’s margin account to fund
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