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Subject:  Re: retire early study Date:  2/10/2000  10:20 PM
Author:  eugenecowan Number:  3628 of 876371

Foolishtomtom: if you exercise stock options while a resident of CA, you will be taxed by CA. The exercise of stock options is a recognition event treating the excess of the fair market value of the underlying stock over the amount paid for the stock (the "spread") as compensation income. Because the "spread" is compensation income, it is likely that CA will nail you even if you exercise after moving, since the compensation income will be "sourced" in CA, where you will formerly employed. If your options are incentive stock options, the results are different.
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