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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Eric Somers who wrote (25991)	2/3/2000 6:01:00 PM
From: Greg Hull	Respond to of 29386

Eric, <<What makes sense to me is that the full revenue is taxable, but the warrant discount is deducted from that number to get the net taxable income. I did not mean to imply a double tax break.>> <<I'm not an accountant though>> That makes two of us, so I really shouldn't be continuing this discussion, but I will anyway. I believe Ancor has acknowledged in their filings that it is conceivable the the sales discount from the warrants could result in negative revenue (GAAP reporting). If this be true, and the discount is tax deductible, then Ancor would collect gobs of cash from Sun, but report negative revenue (if Sun were their only significant customer) and therefore negative net profit. They would not only pay no tax, but continue to amass a tax credit against future years when they're raking in the dough and have no more Sun warrant deducts. This has been discussed here months ago, and I believe tax accountants and friends of tax accountants were unsure of the deductibility. You're right, we should be able to press Steve Snyder on this issue and get a definitive answer. Greg