发布日期：2007年11月

摘要：

This 1,250 word article is taken from the 01 November 2007 edition of The Tax Adviser.

Abstract:

Under Sec. 83(a), if property is transferred in connection with the performance of services, the employee who performed the services has gross income in an amount equal to the excess of the fair market value (FMV) of the property over the amount paid for the property. Sec. 83(a) also states that both the income event and the measurement of FMV of the property occur only when the property is first either transferable or not subject to a substantial risk of forfeiture. Under Regs. Sec. 1.833(a)(1), a transfer of property occurs when a person acquires a beneficial ownership interest in such property. When property is received in the form of a nonqualified stock option, Sec. 83(e)(3) requires that the option must have a readily ascertainable FMV to be taxed to the employee at grant.

In Racine, 7/3/07, the Seventh Circuit addressed the issue of when a transfer occurs for Sec. 83 purposes. The decision provides a cautionary tale for taxpayers who use nonrecourse debt to finance the exercise of their stock options.

Facts

Racine was employed by a large telecommunications company during the 2000 tax year. As part of her compensation package, ...

COPYRIGHT 2007 American Institute of CPA's


Article Information:

Published in: The Tax Adviser
Issue Number: 11
Volume Number: 38
Date Published: 01 November 2007
Language: English
Word Count: 1250


Author(s) of this article include:

Maio, Jim