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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (174519)	5/12/2003 9:18:11 PM
From: Saturn V	Read Replies (1) \| Respond to of 186894

<Taxation of options to the employee> You are right that the option grant could be considered income, by extending the Black-Scholes Model. However if taxed the employee will view the option as a liability. He will have to pay taxes on it immediately. Remember the option cannot be exercised for several years, and he will make money only if at the end of the minimum exercise period, the value of the company stock goes up. So the option will be an employee disincentive, rather than the incentive the company intends it to be. So the IRS makes the option grant a non-taxable event if the option is issued at market value on the date of the grant. The tax liability shows up on the date of the exercise. Even though this should be a risk free event, I know of several people who are in the poor house due to option exercise during the market meltdown. Message 18520470 Regarding the dilution method, I explained that in a very recent post. Message 18926615