A woman with breast cancer who was fired from her job sued her employer for wrongful termination. The parties settled, with the woman receiving cash plus 650,000 shares of stock in the corporation. The agreement valued the stock at $2.38 per share, which she reported on her federal income tax return. However, she later filed an amended return, claiming a lower stock value. The IRS denied her claim, and she appealed in U.S. District Court in New Mexico. What did the court decide?
Read the Verdict
At trial, the IRS and the taxpayer each brought their own valuation experts. The court sided with the woman’s expert, who valued the stock at $0.57 per share.