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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Kaye Thomas who wrote (2306)	9/22/1999 2:46:00 PM
From: Proud_Infidel	Respond to of 5810

Kaye, Thanks for the response. Though disappointed, at least I now know there is probably little I can do about it and so there is no reason to get upset. Thanks again, Brian

To: Kaye Thomas who wrote (2306)	9/28/1999 11:05:00 PM
From: William Sheppard	Read Replies (1) \| Respond to of 5810

Kaye, I'm currently in escrow on a house. I will be paying about $200K down, of which $100K is stock in my ESPP account, all purchased over the last two years with substantial appreciation (4x for some of it). I believe I'll get killed by taxes if I liquidate this now, but I'd like to protect the current value. I can get a loan from family for the amount of this stock, so I don't need to liquidate it right away. Will the IRS rules allow me to short the current number of shares I own now and then close out the short in January, thus at least protecting me until then? Is there any downside to that strategy? Alternatively, can I buy puts to protect the current value as long as the puts expire (or I close them out) before I liquidate the stock? Finally, do I only need to protect it until I've owned the stock one year, or is there an additional year of tax consequence due to the stock being purchased for 85% of the lower of the price at the beginning or end of the six-month plan period? Thanks! Bill

To: Kaye Thomas who wrote (2306)	9/29/1999 2:35:00 AM
From: Richard Nehrboss	Read Replies (2) \| Respond to of 5810

Hey Kaye, or Colin... Quick question: I own a company in which I keep assets (MSFT, CSCO, etc) that has greatly appreciated. I was worried briefly about accumulated earnings tax. I found out that the IRS can include appreciated assets in the calculation of such a tax. Fortunately, I learned that the assets are used to calculate if you have accumulated earnings, but the tax is only based on actual earnings, therefore I'm off the hook. My next worry, is some kind of personal service corp tax. The only income the company has is from sale of shares of appreciated stock. At that time I pay the corporate tax on the capital gain (less margin interest) and distribute it as a dividend to myself. I then pay my share of the tax. Is everything cool here? Thanks Richard