Kevin B. Kimberlin and Joni R. Steele, et al. - Page 2
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Held: R’s determination is in error because the
warrants were not transferred in connection with the
performance of services.
Held, further, the warrants had an ascertainable fair
market value on the date of grant in 1995 and are therefore
taxable in that year.
Solomon Leo Warhaftig, David Lederkramer (specially
recognized), Peter Adebanjo (specially recognized), and Andre
Castaybert (specially recognized), for petitioners.
Lydia Branch, Shawna Early, and Fredrick Mutter, for
FOLEY, Judge: The issues for decision in these cases are
whether: (1) Warrants issued to petitioners in accordance with a
settlement and release agreement were transferred in connection
with the performance of services and therefore constitute taxable
income pursuant to section 83;2 (2) the warrants had a readily
ascertainable fair market value in 1995, on the date of grant, or
in 1997, the year of exercise; and (3) the payment to Kevin
2 Unless otherwise indicated, all section references are to
the Internal Revenue Code for the years in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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Last modified: November 10, 2007