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To: gingersreisse who wrote (29823)8/11/2000 10:06:32 AM
From: saukriver  Respond to of 54805
 
Employee stock purchase programs

Thanks for your succinct explanation of these programs. I have often wondered how they work.

21-month holding period seems short. In the US, selling appreciated stock would trigger capital gains if the sale occurred within 12 months. So, you are really just tacking on an additional 9 mos. of holding period.

The 21-month period would really come to play if the stock depreciates and you want to bail. You might want to take a tax loss, but you could be cracked with ordinary income if you sell within 21 mos. Effectively, it forces employees to ride out the storm out. Not a bad thing.

saukriver