128 T.C. No. 13
UNITED STATES TAX COURT
KEVIN B. KIMBERLIN AND JONI R. STEELE, ET AL.1, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 24499-04, 24500-04, Filed May 8, 2007.
8752-05.
X and Y entered into a private placement agreement,
pursuant to which X would serve as the placement agent for
the sale of Y’s preferred stock. Y did not adhere to the
agreement. A dispute ensued and was later settled.
Pursuant to the settlement agreement, in 1995 Y issued to X
warrants to purchase shares of Y preferred stock. In 1997,
the warrants were exercised. R, in his notices of
deficiency, determined that the warrants were transferred in
connection with the performance of services, and the income
from the warrants is taxable in 1997 pursuant to sec. 83,
I.R.C.
1 Cases of the following petitioners are consolidated
herewith: Kevin Kimberlin Partners Ltd. Partnership, Kevin B.
Kimberlin, Tax Matters Partner, docket No. 24500-04; and Spencer
Trask & Co. and Subsidiary f.k.a. Spencer Trask Holdings, Inc.
and Subsidiary, docket No. 8752-05.
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Last modified: November 10, 2007