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respondent has abated an assessment based on petitioners’ amended
return for 2001 and (2) whether petitioner Cindy Chou (Mrs. Chou)
qualifies for relief under section 6015(f). Unless otherwise
indicated, all section references are to the Internal Revenue
Code.
These issues arise in the context of a frequently occurring
factual situation involving the alternative minimum tax (AMT) on
incentive stock options (ISOs) exercised in 2000, followed by a
drop in the value of the shares, a claim by the taxpayer that the
taxable event occurred in a later year when the value of the
shares was lower, and attempts to avoid or compromise the
outstanding AMT liability.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference.
Petitioners resided in California at the time that their petition
was filed.
Petitioners have been married at all times since 1996. They
have two children, the older of whom was born on August 1, 2000.
Mrs. Chou graduated from the University of Texas with a degree in
radio, television, and film and studied interior decorating after
college. Mrs. Chou has a small interior design business, but she
is mainly a stay-at-home mother for petitioners’ two children.
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