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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 74.47

+1.9%

Nov 3 3:59 PM EST

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To: jbn3 who wrote (24349)	4/12/1999 7:36:00 PM
From: Jay Couch	Read Replies (3) of 77397

Guys, The reason that someone would want to immediately exercise and sell stock options (ISO's or NQSO's) is because they can't afford to exercise them (pay the option price) and hold on to them for a year (to only have to pay long term capital gains). AMT is a tax you must pay, regardless of if you sell the options, or not. So, if you were to exercise options that you had CSCO options, for say, $10/share, you'd have to pay AMT on the difference between your option price $10, and the Fair Market Value, $118. I forget what the percentage is, but, if you add that cost into the cost of the options, it just makes sense to do Same-Day Sales on them. At least that's my understanding of it. Jay

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