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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (24801)	11/27/1997 6:49:00 PM
From: Clare	Read Replies (1) \| Respond to of 61433

<<Also in order to redeem options one will generally need to sell a certain fraction of the shares to a) buy the remainder, b) pay income taxes. If you had options to buy at $10 the tax is due on the market difference when you buy (is this right?) and so there goes 25% for taxes, now you need the money to buy (even hi-tech millionaires can live from paycheck to paycheck) so another 1/3 of the sum gets sold. Somebody who's done this can clue us in better. Greg>> Also it is advantageous to exercise your options at the time the stock price is LOW, if you intend on buying and holding, rather than doing a same day sale. As perverse as it sounds, when you exercise when the price is low, you have lower capital gains and lower taxes. Thus, you sell some shares to pay for the purchase and taxes for buying out the rest of your options. If you were intending on doing a same day sale you would wait until the price is high and pay taxes off your proceeds.