Tanner v. Comm'r
United States Tax Court
P planned to acquire control of C, a corporation. C required P to sign a lockup agreement, which restricted P's sale of any C stock. The agreement provided that, if P sold the stock within 2 years of its acquisition, he would be subject to sec. 16(b) of the Securities Exchange Act of 1934. On July 9, 1993, P received a nonstatutory employee stock option from C. On Sept. 7, 1994, P exercised this stock option.
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P planned to acquire control of C, a corporation. C required P to sign a lockup agreement, which restricted P's sale of any C stock. The agreement provided that, if P sold the stock within 2 years of its acquisition, he would be subject to sec. 16(b) of the Securities Exchange Act of 1934. On July 9, 1993, P received a nonstatutory employee stock option from C. On Sept. 7, 1994, P exercised this stock option. P pledged some of this stock as collateral for a loan, and the stock was sold by the lender. C issued P a Form 1099 for 1994 reporting income from P's exercise of the stock option. On…
1Opinion of the Court
Vasquez, Judge:
Respondent determined a deficiency of $286,659 in petitioners’ 1994 Federal income tax. On their 1994 tax return, petitioners reported income from wages of $161,067.
The issues for decision are: (1) Whether petitioners had unreported income of $728,000 in 1994 from the exercise of a nonstatutory employee stock option; and (2) whether respondent proved a substantial omission of income under section 6501(e)1 to extend the period of limitations to 6 years.2
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are…
2Cases cited10 opinions
- Commissioner v. LoBueSupreme Court of the United States · 1956
- Ramon Portillo and Dolores Portillo v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1991
- Fed. Sec. L. Rep. P 90,216 Magma Power Company v. The Dow Chemical CompanyCourt of Appeals for the Second Circuit · 1998
- Jackie L. And Janet G. McDonald v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1985
- Kolom v. Comm'rUnited States Tax Court · 1978
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