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Subject:  Re: Taxes after the NASDAQ drop Date:  4/28/2001  11:08 AM
Author:  phooley Number:  50666 of 123001


A friend o'mine is telling me that some investors who managed to make some serious dough on the bull market are now facing the prospect of having to pay taxes on price that is no longer there. She stated that some employees offered shares by their tech companies did not sell before the drop (under "Wise" advise) and now they have to pay taxes on the previous value of the stock, owing the IRS some hundreds of thousands on money they never had.

Yes, your friend is correct. This has gotten fairly wide coverage in the press over the past few months. Here's an example I found via

Mr. Chou used incentive stock options to buy about 100,000 Cisco shares last year, paying 5 to 10 cents per share. At the time, Cisco stock was trading between $60 and $70 a share. The difference between the price he paid and what the shares were worth - a total of about $6.9 million - is taxable to him as profit, even though he nev