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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Colin Cody who wrote (1604)	12/14/1998 1:05:00 PM
From: Rob LeVine	Read Replies (2) \| Respond to of 5810

Comments on non-qualified stock options? Here's my situation: I have non-qualified stock options from my employer. Let's assume that if I were to excerise/sell some of them my wife and I would be in the 36% tax bracket. OK, my brilliant idea is to actually BUY some of the vested options and hold for a year, thus saving 16% in taxes. Obviously this makes the assumption that the value of the stock will at least stay the same or increase in the next 12 months (your guess is as good as mine as to whether that's true). Also, I do realize that the money I use for buying could've been making money somewhere else. Also, what do you think of actually BORROWING the money for the purchase in the form of a margin or home equity loan? Good idea? Bad idea? Random comments appreciated. - Rob

To: Colin Cody who wrote (1604)	12/15/1998 11:19:00 PM
From: Baghul	Read Replies (2) \| Respond to of 5810

I am not sure what you mean by ticket confirmations. Lets take an example. I buy 10 shares of INTC at 110 and pay commission of 9.99. A while later I sell the shares for 130 and pay same commission. Are the following calculations right? Buying cost: 10 shares @ $110 = 1100.00 Commission = 9.99 ----------------------------- Total = 1109.99 Selling cost: 10 shares @ $130 = 1300.00 Commission = 9.99 ---------------------------- Total = 1290.01 Capital Gain = 1290.01 - 1109.99 = 180.02 Assuming you are in the 28% bracket you would pay 0.28*(180.02) which comes out to be about 50 in taxes. Is this what you mean by the new system. Thanks in advance