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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: Andrew H who wrote (14305)	1/8/1999 12:17:00 PM
From: Suzanne Newsome	Read Replies (2) \| Respond to of 44908

Anybody have any TSIG stock that would qualify for long-term capital gains treatment? That is, stock that's been held for more than 18 months that would taxed at a rate of 20% versus ordinary income rates of up to 40%. Let's assume Investor A has 50,000 shares at an average cost of 20 cents per share. Investor A is very net savvy and has traded in and out of TSIG, buying and selling every stock ever spammed on the TSIG thread. However, in a monumental stroke of good luck, he sells his 50,000 shares on a run-up to $2.00 after Dixie announces that the Clinton Defense League signed a contract for 10 million cards. If Investor A has a typical professional/managerial income and lives in a state that taxes income at 7%, what would his tax bill on his TSIG profits be if taxed as ordinary income? Investor A: [(2.00-.20)(50,000)](.40+.07)= $42,300 Investor A's brother, Klutz, has the same number of shares at the same cost, and is in the same income bracket. Klutz sadly is not net savvy having just bought his computer and is still trying to sign up with AOL. Klutz, knowing how important it is to do good due diligence, and hearing about spam, goes out and buys a can. He is generally clueless about the thread, holds his stock for more than 18 months, sells at $2.00, and pays the following taxes: Klutz: [(2.00-.20)(50,000)](.20+.07)=$24,300 OR $18,000 less than his brother! For those of you with long attention spans who have read this far, let's compare the tax bills (ordinary income versus long-term capital gain) if we assume the brothers have an average cost of 35 cents per share and both sell at $10. Investor A: [(10.00-.35)(50,000)](.40+.07)=$226,775 Klutz: [(10.00-.35)(50,000)](.20+.07)=$130,275 OR $96,500 less than his brother! If you noted any errors in this analysis, please send an e-mail to my accountant, bonzotheverbose@aol.com Regards, Suzanne