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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 74.45

+1.8%

9:30 AM EST

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To: Jay Couch who wrote (24352)	4/12/1999 9:14:00 PM
From: The Phoenix	Read Replies (3) of 77397

Actually it makes more sense to take out a loan to pay to exercise - hold for a year and get 20% tax rate as opposed to exercising and selling and paying income tax rates of 36%. AMT becomes a non-issue if you exercise and sell.... AMT is an adjunct tax calculation that only applies if you exercise and hold...it is meaningless otherwise since AMT is intended to capture taxes on expected future profits. It's governments way of getting taxes now on unrealized gains. When you actually sell the underlying security you get a tax credit for the amount of the AMT and are then taxed for capital gains on the difference between the option price and the selling price. OG

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