|
PureBytes Links
Trading Reference Links
|
The fairness of tax law can be debated ad nauseam. However there can be no
mistaking the real world of gains and losses from a financial standpoint ...
you have a gain, realized (converted to cash) or unrealized (holding asset
in expectation of further increase in value) you have made money. If the law
is such that you must declare unrealized gains for tax purposes (applies to
many situations other than options), then you must provide for that
liability. There are many head-in-the-sand investors who refuse to accept
the cold hard fact that they have losses on their NASDAQ stocks ... does not
mean that they have not lost money, simply means they choose not to realize
the loss.
Earl
----- Original Message -----
From: "John Hall" <jrhall@xxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, June 23, 2001 10:35 AM
Subject: Re: [RT] Tech workers upset that they owe taxes on underwater
options
> Let's take an example. Someone exercises options and incurs a tax bill of
> $1,000,000. Six month later their stock is worth $150,000. Under the
> current rules they still owe $1,000,000. If they sell the stock before
year
> end in the same year the options are exercised they take a loss and the
loss
> is put against the original bill and no taxes are owed. If they hold the
> stock past the start of the new tax year they owe the tax for the previous
> tax year and if they sell in the current tax year they still owe
$1,000,000
> in taxes. The loss this year then is used against the previous reported
> gain and again the net is still $0 in taxes paid. Problem is that until
the
> position is closed out the government still charges you with a gain
whether
> there is really one or not.
>
> Just because a person exercises options does not mean they have made any
> money at all.
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
|