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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.39

+1.3%

Nov 19 3:59 PM EST

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To: Jay Couch who wrote (24352)	4/13/1999 11:32:00 AM
From: TigerPaw	Read Replies (1) of 77400

and hold on to them for a year (to only have to pay long term capital gains I had to mess with options this year. The way it worked for me was that at the time of excersize, regarless of whether you immediately sold or bought the shares, you owe regular income tax on the difference between the option strike price and the current market value. AMT is not directly involved, although anytime you have a high income the AMT may disallow various deductions. (regarless of the reason for the high income) If you take possession of the shares, you pay the tax (right then with some other cash on hand), but your basis in the shares becomes the current market price. If the stock goes up and you hold a year it is capital gains (or loss if it goes down). It's really just the same as if you excersize for cash and then buy the stock, except you don't pay additional commissions. The decision comes down to Do you want shares of this stock at the current price? TP

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