Bagley v. Commissioner
United States Tax Court
In 1975, petitioner Hughes A. Bagley was granted an option to purchase 10,000 shares of his employer's common stock. In 1978, petitioner received from his employer a $ 70,000 payment in exchange for the termination of the option, and a $ 50,000 fee in exchange for his agreement to perform consulting services for 1 year. The consulting fee was reported as income on the Federal income tax returns of a corporation wholly owned by petitioner.
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In 1975, petitioner Hughes A. Bagley was granted an option to purchase 10,000 shares of his employer's common stock. In 1978, petitioner received from his employer a $ 70,000 payment in exchange for the termination of the option, and a $ 50,000 fee in exchange for his agreement to perform consulting services for 1 year. The consulting fee was reported as income on the Federal income tax returns of a corporation wholly owned by petitioner. Held, the $ 70,000 received by petitioner in exchange for the termination of the option is treated as compensation under sec. 83, I.R.C. 1954, and is thus…
1Opinion of the Court
Hughes A. Bagley and Marilyn B. Bagley, Petitioners v. Commissioner of Internal Revenue, Respondent
Bagley v. Commissioner
Docket No. 18838-82
United States Tax Court
85 T.C. 663; 1985 U.S. Tax Ct. LEXIS 25; 85 T.C. No. 39;
October 30, 1985, Filed
Decision will be entered for the respondent.
In 1975, petitioner Hughes A. Bagley was granted an option to purchase 10,000 shares of his employer's common stock. In 1978, petitioner received from his employer a $ 70,000 payment in exchange for the termination of the option, and a $ 50,000 fee in exchange for his agreement to perform consulting services for…
2Cases cited28 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Lucas v. EarlSupreme Court of the United States · 1930
- Moline Properties, Inc. v. CommissionerSupreme Court of the United States · 1943
- Commissioner v. LoBueSupreme Court of the United States · 1956
- United States v. BasyeSupreme Court of the United States · 1973
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