McNamara v. Commissioner
United States Tax Court
In 1945, corporation gave one of its officers an option to purchase 12,500 shares of its stock at stated intervals over a two-year period at less than market value. Officer exercised option in 1946 and 1947 when the fair market value of the stock exceeded the option price.
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In 1945, corporation gave one of its officers an option to purchase 12,500 shares of its stock at stated intervals over a two-year period at less than market value. Officer exercised option in 1946 and 1947 when the fair market value of the stock exceeded the option price. Held: 1. Gain derived from the option was intended as compensation. 2. The intended compensation was the difference between the option price and the fair market value of the stock on the dates the option was exercised and the stock acquired. Connolly's Estate v. Commissioner, 135 F. 2d 64 (C. A. 6), affirming 45 B. T. A.…
1Opinion of the Court
Harley V. McNamara, Petitioner, v. Commissioner of Internal Revenue, Respondent
McNamara v. Commissioner
Docket No. 29846
United States Tax Court
19 T.C. 1001; 1953 U.S. Tax Ct. LEXIS 229;
March 5, 1953, Promulgated
Decision will be entered under Rule 50.
In 1945, corporation gave one of its officers an option to purchase 12,500 shares of its stock at stated intervals over a two-year period at less than market value. Officer exercised option in 1946 and 1947 when the fair market value of the stock exceeded the option price. Held:
1. Gain derived from the option was intended as compensation.
2. The…
2Cases cited9 opinions
- Old Colony Trust Co. v. CommissionerSupreme Court of the United States · 1929
- Commissioner v. SmithSupreme Court of the United States · 1945
- Commissioner v. SmithSupreme Court of the United States · 1945
- Van Dusen v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1948
- Stone v. ComissionerUnited States Tax Court · 1953
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