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DH got about 1400 options from another company at a penny per share.

How did he get these? Did he buy them? Were they given to him? Does that company have a stock option plan?

They were options that he bought for 1 penny per share. No, the company does not have a stock option plan.

He surrendered some shares to cover the tax, and ended up with only 90 shares.

What do you mean by surrender? What happened?

He was given 140 shares. He opted to sell 50 immediately to cover the tax. He ended up with 90 shares. Still, I don't know how to treat this on tax forms.

Those 90 shares vested in 2002. How do we deal with this on our return?

Hopefully this is a bit more enlightening. Thanks for any insight you can share.

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