Merlo v. Commissioner of Internal Revenue

KING, Circuit Judge:

Petitioner-appellant Robert Merlo exercised an incentive stock option in 2000. In an action brought to determine his federal income tax liability, the tax court held that for alternative minimum tax purposes, Merlo realized income from the option’s exercise in 2000. The stock became worthless in 2001, and the tax court held that the resulting capital loss could not be carried back as an alternative tax net operating loss to 2000 to offset the income from the option’s exercise. We AFFIRM.

I. FACTUAL AND PROCEDURAL BACKGROUND

In December 2000, petitioner-appellant Robert Merlo…