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Rev. Rul. 2004-37: Employee Has Income When Debt to Employer Reduced (PDF)
Internal Revenue Service [IRS] 
[Official Guidance] Feb. 26, 2004
9 pages. Excerpt: If an employee issued a recourse note to his or her employer in satisfaction of the exercise price of an option to acquire the employer's stock and the employer and employee subsequently agree to reduce the stated principal amount of the note, does the employee recognize compensation income under § 83 of the Internal Revenue Code?
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