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You wrote:

<<A couple of years ago, I was given some options, non-qualified I believe it is called. The
stock at the time was $19 and is currently around $30. When I buy the stock, I will have
to pay taxes on the difference between the $19 and the $30. >>

<< a. Are the taxes I pay income or capital gains? Is there any way to pay 20% instead
of 28%? >>

Income. You have to pay your marginal rate (probably 28%, could be higher)
Your company will probably want the profit when you exercise. The IRS certainly will.

<< b. After the stock is bought and the taxes are paid will the $30 price be my new
base price? >>

Yes.

<< c. Will I then have to wait 18 months and a day to sell the stock and pay 20%
capital gains? >>

Yes. If you sell it the day you get it, it's short term, and you're back at the marginal rate..

As someone who's been in a similar situation, you have my pity. (But not too much -- as you said, you were GIVEN the options. Life could be worse than having to pay taxes on something you got for nothing.)
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