Frank v. Commissioner
United States Tax Court
Petitioner received certain nonstatutory options to acquire the stock of two corporations for which he had rendered services as an organizer, promoter, officer, and director.
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Petitioner received certain nonstatutory options to acquire the stock of two corporations for which he had rendered services as an organizer, promoter, officer, and director. Held: 1. Petitioner was an employee of both corporations, and the options at issue were granted for reasons connected with such employment, and therefore, the rules contained in sec. 1.421-6, Income Tax Regs., are applicable to the instant case. 2. The options at issue did not have a readily ascertainable value at the time of their grant. Consequently, date of grant does not constitute the appropriate taxable event…
1Opinion of the Court
OPINION
At the outset, we observe that it cannot be disputed that either the stock options or the underlying stock involved herein is taxable to petitioner at some point in time. The Supreme Court has clearly held that such stock options represent an economic benefit to petitioner, includable in his gross income as compensation for services rendered within the meaning of section 61 (a). Commissioner v. LoBue, 351 U.S. 243, 247 (1956).
The crux of the controversy between the parties concerns the selection of the appropriate taxable event. Petitioner’s primary argument is that he is taxable at…
2Cases cited19 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Burnet v. LoganSupreme Court of the United States · 1931
- Commissioner v. LoBueSupreme Court of the United States · 1956
- Helvering v. Tex-Penn Oil Co.Supreme Court of the United States · 1937
- Commissioner v. SmithSupreme Court of the United States · 1945
14 more not listed; retrieve them via the Exa API.
3Cited by31 opinions
- Pagel, Inc. v. CommissionerUnited States Tax Court · 1988
- M. P. Frank and Beatrice Frank v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1971
- United States v. Ronald H. PachecoCourt of Appeals for the Ninth Circuit · 1990
- Morris v. CommissionerUnited States Tax Court · 1978
- Horwith v. CommissionerUnited States Tax Court · 1979
26 more not listed; retrieve them via the Exa API.