Babbitt v. Commissioner
United States Tax Court
1. Petitioner, in 1936, as part of his contract of employment as president of a corporation, received an option to purchase 30,000 shares of the company's common stock at $ 2 per share during the term of his employment. The contract was renewed in 1939, at which time the option price was reduced to $ 1.50 per share. In 1944, the contract was again renewed, the option price remaining at $ 1.50 per share.
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1. Petitioner, in 1936, as part of his contract of employment as president of a corporation, received an option to purchase 30,000 shares of the company's common stock at $ 2 per share during the term of his employment. The contract was renewed in 1939, at which time the option price was reduced to $ 1.50 per share. In 1944, the contract was again renewed, the option price remaining at $ 1.50 per share. The number of shares then subject to the option was not less than 20,000. At the time of the 1944 renewal, the option terms were modified to permit its execution by petitioner within the…
1Opinion of the Court
OPINION.
FisheR, Judge:
The Stock Option Issue.
The first issue involved in the instant case is whether or not petitioner realized additional income in 1947 upon his exercise of an option previously granted to him by his employer to purchase its common stock. In 1936, the Sonotone Corporation as part of an employment contract between the company and petitioner granted him an option to purchase 80,000 shares of its common stock at $2 per share, the then listed price of the stock on the New York Curb Exchange. The contract, which was for a period of 3 years subject to termination by either party…
2Cases cited11 opinions
- Commissioner v. SmithSupreme Court of the United States · 1945
- Palmer v. CommissionerSupreme Court of the United States · 1937
- Helvering v. San Joaquin Fruit & Investment Co.Supreme Court of the United States · 1936
- Vestal v. Commissioner of Internal RevenueCourt of Appeals for the D.C. Circuit · 1945
- Uptegrove Lumber Co. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1953
6 more not listed; retrieve them via the Exa API.
3Cited by28 opinions
- Lawrence v. CommissionerUnited States Tax Court · 1957
- Quick Trust v. CommissionerUnited States Tax Court · 1970
- Le Vant v. CommissionerUnited States Tax Court · 1965
- Kane v. CommissionerUnited States Tax Court · 1956
- Purdey v. CommissionerUnited States Tax Court · 1989
23 more not listed; retrieve them via the Exa API.