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 FTB Notice 2008-4: BOB and ESOP Resolution

Results for FTB Notice 2008-4: Bogus Option Basis (BOB) and Employee Stock Option Plan (ESOP) Transactions

The terms of FTB Notice 2008-4 allowed certain taxpayers to resolve BOB and/or ESOP transactions that may be subject to the noneconomic substance transaction (NEST) penalty under Revenue and Tax Code Section 19774. The BOB and ESOP resolution began on June 23, 2008, and ended on September 12, 2008.

FTB received 47 closing agreements, resulting in $42.7 million in projected cash revenue. A transactional breakdown reveals that the BOB transaction accounts for 95 percent of projected cash revenue, with the remaining five percent relating to the ESOP transaction.