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Fluor payroll department that this was the manner in which the
company reported such transactions.
Petitioner prepared petitioners' Federal income tax return
for 2002. To reflect his belief that the Form W-2 issued to him
by Fluor had incorrectly listed the stock option transaction
proceeds as compensation income, petitioner placed a handwritten
notation on the copy of the Form W-2 attached to petitioners'
2002 return. That notation indicated that the $102,226.81 amount
listed under "Wages, tips, other compensation" consisted of
"WAGES $28,852 CAPITAL GAINS $73,645".4
Petitioners reported a total of $65,690 as wages on the 2002
return, including $28,852.09 in wages for petitioner and
$36,837.55 in wages for Mrs. Svoboda. Petitioner reported on
Schedule D, Capital Gains and Losses, of the 2002 return what he
calculated as the net result of the February and July 2002 stock
option transactions; namely $51,4695 of long-term capital gain,
4 Petitioner appears to have made a mathematical error in
calculating his "Capital Gains" figure, as $73,645 plus $28,852
does not equal the $102,226.81 amount listed on the Form W-2.
5 There are two errors underlying this figure. First, the
parties stipulated that the long-term capital gain that
petitioners reported on Schedule D of their 2002 return from the
2002 stock option transactions was $56,949. However, the
Schedule D is part of the record, and it demonstrates that the
reported gain from the stock options transactions was $51,469.
The figure to which the parties stipulated resulted from the
erroneous treatment of a $2,740 loss on one block of Fluor stock
as a gain, producing the $5,480 ($2,740 x 2) discrepancy between
(continued...)
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