Gresham v. Commissioner
United States Tax Court
Sec. 57(a)(6), I.R.C. 1954, includes as a tax preference item the difference between the fair market value and the option price of stock issued upon the exercise of a qualified stock option. Held: Where the option shares are subject to the restrictions of the Securities Act of 1933 as amended and an investment letter, the fair market value is the discounted value which would be realized in a private placement.
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Sec. 57(a)(6), I.R.C. 1954, includes as a tax preference item the difference between the fair market value and the option price of stock issued upon the exercise of a qualified stock option. Held: Where the option shares are subject to the restrictions of the Securities Act of 1933 as amended and an investment letter, the fair market value is the discounted value which would be realized in a private placement. Sec. 1.57-1(f)(3), Income Tax Regs., which directs that restrictions which lapse should be ignored in determining fair market value, is invalid.
1Opinion of the Court
Louis B. Gresham and Margaret S. Gresham, Petitioners v. Commissioner of Internal Revenue, Respondent
Gresham v. Commissioner
Docket No. 14686-79
United States Tax Court
79 T.C. 322; 1982 U.S. Tax Ct. LEXIS 51; 79 T.C. No. 20;
August 16, 1982, Filed
Decision will be entered under Rule 155.
Sec. 57(a)(6), I.R.C. 1954, includes as a tax preference item the difference between the fair market value and the option price of stock issued upon the exercise of a qualified stock option. Held: Where the option shares are subject to the restrictions of the Securities Act of 1933 as amended and an investment…
Also in this document: Concurrence; Dissent.
2Cases cited27 opinions
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- United States v. CorrellSupreme Court of the United States · 1967
- Bingler v. JohnsonSupreme Court of the United States · 1969
- Brewster v. GageSupreme Court of the United States · 1930
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