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treating the date of the options' grant as the acquisition date
of the stock and the date of option exercise and sale as the sale
date.
Following notification by respondent that the 2002 return
was under examination, petitioner made several efforts to
investigate the proper tax treatment of the two stock option
transactions. In the course of his subsequent discussions with
Internal Revenue Service personnel, petitioner was referred to
IRS Publication 525, Taxable and Nontaxable Income.
5(...continued)
$56,949 and $51,469. We are not bound by stipulations of fact
that appear contrary to the facts disclosed by the record, see
Rule 91(e); Blohm v. Commissioner, 994 F.2d 1542, 1553 (11th Cir.
1993), affg. T.C. Memo. 1991-636, and accordingly find that
petitioners reported $51,469 of long-term capital gain from the
Fluor stock option transactions in 2002.
Second, petitioner conceded at trial that the sales price
for the same block of Fluor stock was incorrectly reported on the
Schedule D as $19,025 when it should have been $40,859, which
results in a gain of $19,093 rather than the reported loss of
$2,740. (Respondent described the correct gain as $19,025, but
the documentary evidence suggests the gain is $19,093.) When a
gain of approximately $19,000 is substituted for the reported
loss of $2,740, the net long-term gain arising from petitioners'
reporting of the Fluor stock option transactions approximates the
$73,374.72 in proceeds from "Nonqualified plans" reported on the
Form W-2 issued by Fluor to petitioner. We expect the parties to
address any remaining discrepancies in their Rule 155
computations.
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