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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Cosmo Daisey who wrote (52188)	12/1/1999 10:15:00 PM
From: S100	Respond to of 152472

< If you make 10,000,000 in stock options its capital gains and taxed as such. > An employee exercising non-qualified (these are the stock options given to the employee) stock options results in about 45% of the difference between the sale price of the stock and the option cost( perhaps $20 per share) withheld. (39+% federal and 9+% for California). Considered short term Cap Gains. At least for non-qualified stock options. Don't know about qualified options but seems they would be treated the same for taxes at time of exercising the option. Qualified stock options can only be sold at certain times and subject to SEC regs as far as I know. Is there a CPA in the house? ------------------------- From IRS 525 Employee Stock Options There are three classes of stock options--incentive stock options, employee stock purchase plan options, and nonqualified options. Generally, incentive stock options and employee stock purchase plan options are not taxable to the employee either when the options are granted or when they are exercised (unless the stock is disposed of in a disqualifying disposition). However, the spread (between the exercise price and fair market value of the stock at the time of exercise) on employee stock purchase plan options is subject to social security, Medicare, and Federal unemployment (FUTA) taxes when they are exercised. Additionally, the spread on nonqualified options normally is taxable to the employee as wages when the options are exercised (see Regulations section 1.83-7). These wages are subject to social security, Medicare, and FUTA taxes, and income tax withholding.