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Politics : PRESIDENT GEORGE W. BUSH
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To: CYBERKEN who wrote (730783)3/10/2006 4:27:49 PM
From: JDN  Read Replies (3) of 769670
 
I just finished my tax return today. I owed a bundle cause of phantom income. Most of the phantom income came from a stock option I exercised. The stock is restricted and cannot be sold by me to anyone other then the issuer YET I bought it at the book value that existed at the time of the stock option issuance. In every manner this was a qualified stock option, BUT since I am a DIRECTOR it turns out only EMPLOYEES can have qualified stock options thus mine, by definition is NON QUALIFIED. So, I had to pick up as ORDINARY INCOME the difference between the book value when the option was issued and the book value when I exercised it. Now, you might think this is fair IF I had a publicly traded security but as stated earlier its RESTRICTED STOCK and thus can ONLY be sold back to the issuer of the option at the BOOK VALUE. Thus, I have paid regular income taxes not capital gain and there is no promise of profit just because at this moment in time I can sell it to no one else. I dont think thats fair. jdn
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