$36M Executive Stock Option: Was it Reasonable, Contingent Compensation?

Business Valuation UpdateVol. 18 No. 3
Legal and Court Case Update
March 2012

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6141 Personal Credit Institutions
522210 Credit Card Issuing
federal taxation
Davis v. Commissioner (I)
T.C. Memo 201---286; 2011 Tax Ct. Memo LEXIS 278
December 12, 2011
US
Federal Court
N/A
United States Tax Court
Alex Howard (taxpayer)
Kroupa

Summary

Tax Court finds $36 million exercise of executive stock option was taxable income to the shareholder, but permitted company to take the same amount as deduction for reasonable compensation for the executive’s services.

See Also

Davis v. Commissioner (I)

Full Text of Court Cases
December 12, 2011

Tax Court finds $36 million exercise of executive stock option was taxable income to the shareholder, but permitted company to take the same amount as deduction for reasonable compensation for the executive’s services.