Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 163.32

+2.3%

Nov 21 3:59 PM EST

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To: rkral who wrote (114616)	2/27/2002 1:26:53 PM
From: shoe	Read Replies (1) of 152472

The one point I have to make is that in the first case the $14,000 in taxes was paid on phantom income because the stock was acquired and not sold. So when the stock is ultimately sold, that $14,000 has to be figured into (hopefully subtracted from) the long term capital gains taxes due because it is an amount that has been actually prepaid in anticipation of the ultimate gain. What's bad is when people have a huge phantom gain to pay a tax on and then the stock value drops below the tax owed. I would never exercise options to hold a stock when the disparity between the option price and the market price is so large, e.g. $50,000-$10,000 = too much phantom income. I might exercise if the market price was $12, not $50! Regards.

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