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Commissioner v. Lo Bue

United States Court of Appeals, Third Circuit
Jul 8, 1958
256 F.2d 735 (3d Cir. 1958)

Opinion

No. 12580.

Argued June 10, 1958.

Decided July 8, 1958.

Kenneth E. Levin, Washington, D.C. (Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Melva M. Graney, Attys., Dept. of Justice, Washington, D.C. on the brief), for petitioner.

Richard Barrett, Boston, Mass., for respondent.

Before KALODNER, STALEY and HASTIE, Circuit Judges.


This is an appeal from a decision of the Tax Court, rendered on remand from the Supreme Court. The Supreme Court held that options granted an employee to purchase stock of his corporate employer yielded him taxable gain which "should be measured as of the time the options were exercised * * *." 351 U.S. 243, 249, 76 S.Ct. 800, 804, 100 L.Ed. 1142. The Court concluded its opinion with this observation and direction. "It is possible that a bona fide delivery of a binding promissory note could mark the completion of the stock purchase and that gain should be measured as of that date. Since neither the Tax Court nor the Court of Appeals passed on this question the judgment is reversed and the case is remanded to the Court of Appeals with instructions to remand the case to the Tax Court for further proceedings." 351 U.S. at page 250, 76 S.Ct. at page 804.

The Tax Court has now found that the option was exercised when the employee so advised the corporation and gave it his unconditional promissory note, payable at a future date, for the stock, although the certificates were not delivered until the notes were paid during the next taxable year. 28 T.C. 1317. In the circumstances of this case as outlined in the opinion of the Tax Court and for the reasons stated by the Tax Court we think this was a permissible and proper conclusion.

The judgment will be affirmed.


Summaries of

Commissioner v. Lo Bue

United States Court of Appeals, Third Circuit
Jul 8, 1958
256 F.2d 735 (3d Cir. 1958)
Case details for

Commissioner v. Lo Bue

Case Details

Full title:COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. Philip J. LO BUE…

Court:United States Court of Appeals, Third Circuit

Date published: Jul 8, 1958

Citations

256 F.2d 735 (3d Cir. 1958)

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