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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: steve beckle who wrote (28014)9/7/1999 7:29:00 PM
From: LB11  Read Replies (1) of 42771
 
Check your info on stock options purchase carefully

steve beckle wrote -

<< And if it's like LU, there could be tax implications that makes it more attractive to buy the stock now and hold on to it even if they think it's going up in the future. The money I make on my options will be taxed as ordinary income (ouch) rather than at the capital gains rate. Nothing's free, eh? >>

Check with your accountant and option plan because along with the cash to purchase the stock at your option price, you will also have to pay come up with the cash to pay ordinary income tax on the difference of your purchase price and the stock price at that time. Then you get to pay capital gains after a year on any increase. ( I guess you get to claim a loss if you sell it for less than it was when you took possession - sounds like fun keeping track of that).

Correct me if I am wrong ( I would love to find that I am wrong) but this is what I have found from a couple of accountants. I could not believe what I was hearing. Talk about a "Tax Crock of crap". So there isn't quite the huge tax advantage you might think by taking possession and holding a year or more, although there is some because of capital gains instead of ordinary income tax on the increase that MAY have occurred from the time you took possession until you sell it.

LL
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