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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Logain Ablar who wrote (64682)	6/27/2006 4:33:16 PM
From: ild	Respond to of 110194

<<<It could have been worse if he exercised and held the shares. Stock drops, AMT hits and he'd really be on the hook.>>> Well, what you described happened to my coworkers and me when our semiconductor startup was sold in August 2000. We had all our old shares vested and exercised and were given shares in a new company. So we all were either to sell new shares or to pay AMT. The management encouraged employees not to sell shares and offered no interest loans to people who didn't have the money to pay AMT. Most people listened to the management and didn't sell. Of course the stock cratered soon erasing all or most gains. finance.yahoo.com

To: Logain Ablar who wrote (64682)	6/27/2006 7:36:47 PM
From: ScatterShot	Read Replies (1) \| Respond to of 110194

The stock options most grunt employees get should not trigger the AMT if they do the cashless sell. I've exercised a few times and the income is treated as ordinary income with withholding, SS and Medicare withheld at the same time and all included on the W2 at the end of the year. Even though I find it insane to exercise and hold (use real money to buy at the grant price), your statement is correct, I think. You are taxed on the value of the shares when you exercise even if the value falls. And no tax has been withheld. Maybe a less of a grunt can explain why anybody would want to do that? Oh, yeah, the options are about to expire and yer a greedy, gamblin' sumbitch! Dealer! All in! Let it ride! Double down! Honestly, no lie, I sat next to a guy at the Desert Inn who got an ace and a 10. The dealer started to pay him his 1.5x but he said Wait! I'm doubling down. Sumbitch drew a 10.