Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 36.82

+1.5%

Dec 19 9:30 AM EST

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To: ptanner who wrote (165340)	5/23/2002 8:30:32 AM
From: GVTucker	Read Replies (2) of 186894

ptanner, RE: I don't think there is much distinction on taxes with respect to how options and normal compensation are treated. Someone with direct experience or accounting background should chime in... There is a distinct difference in the way stock options are taxed from a corporate perspective. Corporations actually get a tax benefit from the awarding of options to employees when those options are exercised. And yet even though there is a tax benefit, the corporation does not show any expense on the income statement. It is the best of both worlds from a corporate perspective. That is the primary reason that Cisco was able to avoid paying any taxes at all during the boom years. The critics (and my) viewpoint is that if the corporation gets the tax benefit, they should show the expense. It's as simple as that. Yes, you're right in your conclusion, though. It really is pretty much an accounting issue, and won't affect the cash flow of a company. I think that the only reason that some companies are fighting the issue is that they don't want anyone to realize their "real" earnings.

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