Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 165.03

+1.0%

Nov 24 3:59 PM EST

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To: Morgan Drake who wrote (32576)	6/18/1999 9:26:00 AM
From: JohnG	Read Replies (1) of 152472

Morgan upalnite's problem--As he knows, the tax rules that apply here are 1)20% max cap gains compared to 39.6% max ordinary 2)Gain on options held less than 12 mo & sold is taxed as ordinary 3)Calling the stock is not a taxable event, but it starts a new 12 month time period B4 gain on future sale of the stock will be taxed as capital gain rather than ordinary. Therefore, calling the stock soon has two advantages: 1)It starts the 12 mo clock to cap gains tax treatment now rather than on July 16th--small advantage in my estimation. 2)If Morgan is a real bull and he believes the stock will jump to 150 soon and even higher after the July 20th earnings announcement, selling now gives him time to use the extra margin power B4 the 7/20 earnings announcement. I think the odds are that Morgan's plan will pay off for him. Clearly the "system" opposes Morgan's plan to succeed. The downside risk is small & the upside potential is huge. John G

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