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

To: Stock Farmer who wrote (128627)	5/5/2003 3:44:04 PM
From: carranza2	Read Replies (1) \| Respond to of 152472

Look, don't feel too badly, we all make mistakes from time to time. Some bigger than others. Some are so big that they deserve barnyard appellations. Yours was a whopper--no one can deduce cause and effect from the manner in which Dr. J. is selling, especially after he said he'd do so for estate-planning reasons. I know you don't much care for the Q, but this was really a stretch. If you want to take a shot at Q, use something a bit more concrete such as the QSI writeoffs, etc., not something lacking probative value such as Dr. J.'s previously announced stock sales. If you read my posts carefully, you'll note that I disclaim any knowledge about Jacobs' sons' selling. If they are, I suggested a possible tax reason for them doing so. I have no idea if they're thinking along these lines at all, though you seem to think you possess something akin to clairvoyance into the family's motives. Some bright spark suggested estate tax optimization was the reason for selling shares now rather than just inherit them By the way, you totally misunderstood my post. This means your laborious calculations are wrong. Estate tax isnot the point of things, instead it is the basis at which capital gains are calculated. If you buy a stock for $45 dollars and sell it a year later for $65, your capital gains basis is $45 and your capital gain, taxed at 20%, is $20. In Dr. J.'s case, assume his basis/cost is $5. Assume, too, that the market value of his share is $45 when he dies. Dr. J.has a capital gains of $40 on which he pays 20%. If he instead wills the stock to his kids, their basis/cost is $45 because that is the present law. They don't pay capital gains until the stock goes over $45 and they've held for more than six months. Assuming Dr. J's sons' shares have a basis of $10, a reasonable assumption since they got into the company later than he did, their sale at $45 subjects them to 20% tax on $35. If they inherit a similar amount of stock from Dr. J. at a $45 basis, they have in effect paid only 20% on a $35 gain and have retained the same amount of stock.