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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (49416)	6/30/1998 11:06:00 PM
From: jbn3	Read Replies (4) \| Respond to of 176387

re Alternative Minimum Tax Hep Cat, IBD had a nice article on AMT today. (excerpt follows) ... But other factors are at work, too. One is the increasing use of stock options for employee compensation. Senior managers, middle managers and others now often get stock options as part of their pay. The bull market in stocks has made those options valuable -- and therefore subject to tax, UCLA's Klein said. Only incentive stock options -- as opposed to stock options given for other reasons -- get taxed under the AMT system. The difference between the market value of the stock and value of the stock at the exercise price gets counted as taxable income. ... That is obviously one reason that a lot of option holders exercise and immediately sell. Since they will have to pay taxes on the gain in the year exercised, they may well need cash to pay the tax bill. And in DELL's case, if they wait until the end of the year, their tax bill may be a good bit larger, while if they sell the stock immediately and pay the tax they can then establish positions for long-term capital gains with the remainder. JMHO, 3