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That sounds unfair to me. The taxes were due whether they sold the
shares or not, so delaying the sale had no tax effect. The problem comes
about because of the perversely different treatment of shares received
through option exercise before the exercise and after, producing no
offset. Most larger, older firms understand the impact of these sorts of
plans on their employees, and provide information to help them decide a
prudent course of action. These tech companies were new, relatively
small (but growing rapidly), and not focused on the HR issues.
The only part of the issue I don't understand is why the companies did
not withhold at exercise, which would have avoided many of the worst
situations.
Regards
DanG
Me wrote:
>
> Driving the economy into recession and raising living costs to insane
> levels wasn't enough for the tech industry, now the option babies are
> upset because their stock options are underwater and they owe big
> taxes. Sheese. I know people who have gotten into this situation
> and it all occurred because they were greedy. They didn't sell their
> options at exercise time, instead choosing to hold onto the stock so
> they would pay less taxes down the road. Will Congress succumb and
> bail them out like AG has bailed out the big companies that made the
> wrong decisions?
>
> The Valley's Tax Revolt
> By Scott Harris
>
> Tech workers are taking a big tax hit on their stock options. Will
> Congress come to the rescue?
> http://www.thestandard.com/article/0,1902,27355,00.html?nl=int
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