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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: Walter Morton who wrote (12124)	4/7/2000 5:44:00 PM
From: MaryinRed	Read Replies (2) \| Respond to of 18366

Walter... If I recall..from having exercised options in the past.....for some options you have to pay the taxes when you pay for them...and when you own them. Meaning...if you have an option at .10 and the price is currently a $1.00....you have to not only pay the $.10, but you have to pay the taxes on the $.90 (non-realized profits). I have this for a bundle of Citicorp options...when I got slammed with having to pay a fortune in taxes at the time of exercising...(even though I held the stock!!). Sooo.....if that is the case...that explains why they had to sell more than it seems..they would need to ....to pay for those options... I will try to find the tax law citation about this... I just remember...having to scurry to sell some stuff...when I got socked with an Alternative minimum tax....and had to cough up the big bucks... Now...being sharp folks...our EDIG executives...were smart enough to exercise while the price was low (to minimimize what they had to pay then...) and also...to start the clock on "long term gains". I probably have not explained this well...maybe JimC can step in... and more eloquently describe what I am talking about....(I am strategic and analytical...but not particularly articulate...lol) Mary