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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: benwood who wrote (68043)	9/22/1999 1:27:00 PM
From: Exacctnt	Read Replies (1) \| Respond to of 132070

Ben, When exercised, the difference between the exercise price and the grant price is ordinary income. Capital gains take place once the exercised stock is sold. The gain would be the selling price of the stock minus the exercise price. Regards,

To: benwood who wrote (68043)	9/22/1999 1:33:00 PM
From: Don Lloyd	Respond to of 132070

Ben - (...BTW, do exercised stock options get taxed at 28% flat rate or lower if held long term? Without SS taxes, too, I presume. Obviously I've never had any options or I would know this. Well, I have had the option of finding a job with options, I suppose...) I suspect that it is the stock resulting from option exercise that is normally taxed. This would either be at the maximum ordinary income rate or at long term 20% cap gains rate depending on holding period for the stock itself. I also suspect that some tax may be due if stock is made available at below market prices without options. This would likely incur a ordinary income tax rate for the discount below market and a capital gain on later appreciation upon sale. This is probably different for executives than for special qualified employee stock purchase plans. Regards, Don