Intel Corporation (INTC) Message Board

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Technology Stocks : Intel Corporation (INTC)

INTC 46.95

-2.8%

3:59 PM EST

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To: GVTucker who wrote (173092)	2/18/2003 5:07:33 AM
From: rkral	Read Replies (1) of 186894

OT ... GVTucker, re "The employee pays tax on the imputed gain when exercised, and the corporation receives a tax break for that same imputed gain" Suppose an employee is granted non-qualified stock options with an exercise price of $10 and a fair value of $4 per SFAS 123, and later exercises when the market price is $17. What is the imputed gain? Would you be referring to the $3 (17-10-4) in this example. If so, I agree. But I don't understand why you consider it imputed. It is realized cash, at exercise. The $4 is (deferred) realization of compensation income, for which the company should get a tax deduction. The company should not get a tax deduction for the $3 gain, IMHO. I think it does, but I'm not sure. Would you please clarify your use of "imputed gain"? Ron

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