-2-
Held: The difference between the adjusted AMT
basis and the regular tax basis of stock received
through the exercise of an ISO is not a tax adjustment
taken into account in the calculation of an ATNOL in
the year the stock is sold.
Don Paul Badgley and Brian G. Isaacson, for petitioners.
Julie L. Payne, for respondent.
OPINION
HAINES, Judge: Respondent determined deficiencies in
petitioners’ Federal income taxes of $491,829 and $178,664 for
the years 2000 and 2001 (years at issue), respectively. After
concessions,1 the issue for decision is whether petitioners may
increase their 2001 alternative tax net operating loss (ATNOL) by
the difference between the adjusted alternative minimum tax (AMT)
basis and the regular tax basis of stock received through the
exercise of incentive stock options (ISOs) in 2000, but sold in
2001.
1Respondent concedes that petitioners are not liable for
accuracy-related penalties under sec. 6662 for the years at
issue, and that petitioners’ 2001 capital gain will be reduced by
$58,244. Petitioners concede that they are required to report
additional capital gain of $15,147 for 2000.
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Last modified: November 10, 2007