Kevin B. Kimberlin and Joni R. Steele, et al., (2007)
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Kevin B. Kimberlin and Joni R. Steele, et al., (2007)
128 T.C. No. 13
UNITED STATES TAX COURT KEVIN B. KIMBERLIN AND JONI R. STEELE, ET AL.1, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 24499-04, 24500-04, Filed May 8, 2007.8752-05.X and Y entered into a private placement agreement, pursuant to which X would serve as the placement agent for the sale of Y's preferred stock. Y did not adhere to the agreement. A dispute ensued and was later settled. Pursuant to the settlement agreement, in 1995 Y issued to X warrants to purchase shares of Y preferred stock. In 1997, the warrants were exercised. R, in his notices of deficiency, determined that the warrants were transferred in connection with the performance of services, and the income from the warrants is taxable in 1997 pursuant to sec. 83, I.R.C.Held: R's determination is in error because the warrants were not transferred in connection with the performance of services.Held, further, the warrants had an ascertainable fair market value on the date of grant in 1995 and are therefore taxable in that yea...See the full content of this document
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