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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.69

+0.4%

Jan 21 3:59 PM EST

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To: GVTucker who wrote (64086)	5/17/2003 11:44:53 PM
From: Stock Farmer	Read Replies (1) of 77400

GV: My understanding re. taxes for restricted stock (I'm not a tax guy, this is how it's been explained to me). The employee is deemed to have taxable income at the time the restrictions lift (shares "vest"). Ordinary income. Amount of income is equal to the difference between the amount they have to pay for the shares and the market price. IRS allows employees to make a special election to pay the tax at the time of the award rather than at time of vesting. Tax is owed on the difference between the amount paid for the award and the market price on the date of grant. No further taxes are due until disposition of the shares. Depending on various plans this can be an advantageous option to elect, although it can result in having considerable capital tied up either in taxes or in award premium. John

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