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To: BGR who wrote (94719)2/4/1999 11:46:00 AM
From: nolimitz  Read Replies (1) | Respond to of 176387
 
IM not Tiger paw, but where I work we have ISO and NSO employee options. the TC's are different for both. ISO creates tax on sale
and NSO creates tax payable at exercise. just my experience, probably
differs from option to option plan
nolimitz



To: BGR who wrote (94719)2/4/1999 12:13:00 PM
From: TigerPaw  Read Replies (1) | Respond to of 176387
 
As I understand the option plan, If shares are redeemed, that is to say you want to buy the stock at the option price then the difference between the option price and the current market value is taxed as regular income. Now you own the stock and any further appreciation could be captial gains if you hold for another year.

If you buy/sell the option in one transaction it is all regular income. If the option price is very very small, there is little difference between the two choices tax wise.

This applies to options granted as incentive, and not those purchased on the open market.
TP