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Author: stock4mt Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121594  
Subject: Stock option witholding tax Date: 10/27/2006 2:20 PM
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I've got some stock options with a company I used to work for and my intent is to purchase them and hold them for at least a year to take advantage of the long term gain (versus doing a same day sale or sell to cover). I'm trying to understand the reason why it is a requirement to pay witholding taxes on the shares at the time I purchase them versus when I sell them.

Also, if I pay witholding taxes now, come tax time how is it claimed on my 1040 if I haven't sold the shares?

Then when I finally sell, I assume I only pay the difference between the amount witheld and my real gain or loss.

This whole situation seems backward to me.

Thanks,
Mark
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