Taxing options:
It depends on the 'type' of option. The big ones are 'non-qualified' and 'incentive'. Non-qualified is what most people (the masses) get, Grove and senior execs tend to get different sorts (I have no idea what sort they have, maybe 10-Q reports).
Non-quals are taxed as income when sold. However, withholding is applied at 42%. This means that a $10,000 gain from options is withheld so that you get $5,800 and the rest of your income (assuming your income tax rate is less than 42%!) has to be reclaimed in April or you can lower deductions of course.
Incentives work differently, not sure of the details. Note that there would be (and I only just thought of this since someone alluded to it on this thread) a benefit in cashing your options out asap (at a low price = low gain) and swapping into stock for over 1 year, hence paying cap gain at %28 rather than income at 40%. "The point" where it becomes advantageous would be interesting to calculate, but maybe that's what Andy did?
On a totally different subject, and total conjecture on my part, but what does everyone think of the possibility that Intel is waiting until stockholder meeting to announce 3-1 stock split, bigger divident and a switch to NYSE? Maybe inclusion in DJIA around then too.
Anyway, just looking to muddy the waters with a new rumour!
Richard |
