-35- decline to sustain respondent’s determination that petitioners are liable for an accuracy-related penalty for substantial understatement of income tax. Accord Montgomery v. Commissioner, 127 T.C. 43, 67 (2002); Racine v. Commissioner, T.C. Memo. 2006- 162; Facq v. Commissioner, T.C. Memo. 2006-111. E. Holdings We hold that petitioner realized income in 2002 when she exercised her stock options received from CTI. We also hold that petitioners are not liable for the accuracy-related penalty determined by respondent under section 6662(a) and (b)(2). We have considered all arguments made by petitioners for a contrary holding as to the deficiency, and we have considered all arguments made by respondent for a contrary holding as to the accuracy-related penalty. As to the arguments that we have considered but not discussed herein, we have rejected those arguments as without merit. Decision will be entered for respondent as to the deficiency; decision will be entered for petitioners as to the accuracy-related penalty.Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35Last modified: November 10, 2007