Estate of Gresham v. Commissioner

BARRETT, Circuit Judge.

In order to determine “fair market value” under section 57(a)(6) of the Internal Revenue Code of 1954 (26 U.S.C.) (the “Code”) for purposes of the “minimum tax,” 1 Treas.Reg. section 1.57-l(f)(3) (1978) directs a taxpayer to apply the principles found in section 83(a)(1) of the Code. A majority of the Tax Court concluded that the application of section 83(a)(1) valuation principles was inconsistent with the plain language of section 57(a)(6) and thus held section 1.57-l(f)(3) invalid insofar as it requires the fair market value of stock acquired pursuant to the exercise…