Hubbard

MEMORANDUM **

Steven Hubbard appeals the district court’s grant of summary judgment for the government in this tax refund action. For reasons discussed below, we affirm.

Generally, the Internal Revenue Code recognizes two types of stock options: incentive stock options (“ISOs”), which are governed by I.R.C. §§ 421-422 (2004), and compensatory stock options, which are governed by I.R.C. § 83. The government contends that the options at issue here are ISOs, while Hubbard claims that they are compensatory stock options. We need not address the government’s argument on ISO status, because Hubbard’s appeal fails even if the options are governed by § 83.

Hubbard contends that his options were taxable in 1996, the tax year during which they were granted. Under § 83, options are taxable at the time of the grant if they have “readily ascertainable fair market value” at that time. I.R.C. §§ 83(a) & (e); 26 C.F.R. § 1.83-7 (a). To establish that the options had readily ascertainable value at the time of the grant, the taxpayer must show that they met all of the following conditions:

Cramer v. Commissioner, 64 F.3d 1406, 1411-12 (9th Cir.1995) (quoting 26 C.F.R § 1.83-7(b)(2)) (omission…