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Such total wages, tips, and other compensation included $4,234.94
that was shown as “ESPP” in Box 14 of the Fannie Mae Form W-2.
Fannie Mae also gave Ms. Kim a document entitled “2002 Gross Wage
Analysis” (Fannie Mae wage analysis). That document showed,
inter alia, $95,323.62 as “2002 W2 WAGES”. Such wages included
$4,234.94 that was shown as “ESPP-CEP” and “NON-PAYROLL EARNINGS”
in the Fannie Mae wage analysis.
Petitioners timely filed Form 1040, U.S. Individual Income
Tax Return, for their taxable year 2002 (petitioners’ 2002
return). In petitioners’ 2002 return, petitioners showed, inter
alia, on page one “Wages, salaries, tips, etc.” of $95,323.62 on
line 7. The $95,323.62 of “Wages, salaries, tips, etc.” included
the $4,234.94 that was shown as “ESPP” in Box 14 of the Fannie
Mae Form W-2.
Respondent issued to petitioners a notice of deficiency for
their taxable year 2002 (2002 notice). In that notice, respon-
dent determined a deficiency in, and an accuracy-related penalty
under section 6662(a) (section 6662(a) determination) on, peti-
tioners' Federal income tax (tax) for that year of $8,411 and
$1,682, respectively. In making those determinations, respondent
determined to include in petitioners’ gross income the following
amounts: (1) $21,267 of gross proceeds from certain broker
transactions ($21,267 gross proceeds determination), (2) $622 of
interest income from the United States Department of the Treasury
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Last modified: November 10, 2007