Michaelsen v. New York State Tax Commission

OPINION OF THE COURT

Simons, J.

In this article 78 proceeding challenging a State income tax assessment, the issue presented is the proper treatment to be afforded to a nonresident who exercises stock options granted to him as a form of compensation by his New York employer and who later disposes of the stock acquired pursuant to those options. We agree with the position now taken by the Tax Commission that the taxable gain is the difference between the option price and fair market value of the stock on the date the option is exercised, and that gain derived from the subsequent sale of such…