Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: cnyndwllr who wrote (82427)	12/21/2000 11:32:59 PM
From: Peter Singleton	Read Replies (1) of 95453

cnyndwllr, I'm just going off memory here, but my take is the person's situation outlined in your referenced post is even more dire than claimed. As far as I know, if I exercise options at $100 that I paid $5 for, I have $95 in ordinary income for each share exercised, hence 1040 (tax table + perhaps AMT due). If I later sell those shares at $25 per share for cash flow reasons or because I'm concerned they will go lower, I have a capital loss (either short or long term depending on the holding period) of $70 per share. But I can only take $3000 of that capital loss against my ordinary income, which in this scenario includes the $95 per share profit on my exercised options. I'm sure there are folks in this situation. Them's the tax laws, as I see them. Peter

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