I think that no matter if you sell the stock or not, the difference between the stock price (when you exercise the option) and the option strike price is always ordinary income.
A lot of people seem very confused about options, but they aren't that difficult. Let's say you have been granted options for your stock at $100. On the day you exercise your option the price of the stock is $120. You pay $100 for the stock, and have $20 of ordinary income. The cost basis for the stock is now $120. If you later sell the stock for $200 you have $80 of capital gains (long-term or short term, depending on how long you hold it).
Correct. You either pay full income tax on the whole thing, OR you hold the stock and sell it later and pay capital gains tax on the accrued value after your got the stock. Bottom line is you always pay at least some income tax, and usually (because few people actually buy and hold the stock) pay income tax on the whole thing, and never get to leverage any appreciation in value as a capital gains tax rate.
No, stock options are almost always taxed as ordinary income. The basis of a stock option is not set until you exercise the option. With a stock option, you own NOTHING. It is simply a promise by the company to sell you stock at some future date at a fixed price - there is no value to you in that promise, until you exercise the option.
When you exercise the option, you then establish a cost basis of an actual item of value (the stock). Since few people have the money to actually buy their stock outright, they tend to sell the stock on the same day as they exercise the option. Cash out, so to speak. And thus actual ownership of the item - the stock - was less than 365 days, and so it is taxed as ordinary income, not long-term capital gains.
Rarely does someone pay capital gains tax on stock bought via a stock option. You have to pay for the option itself up front, then hold it for at least 1 year. Most people don't have hundreds of thousands of dollars lying around - so they exercise the option and sell the stock on the same day. No money out of their product, but the profits are taxed as full ordinary income (and, because of the values, typically in the several hundred thousand dollar range, the majority is at 39% Federal - and in the state of California, usually 12% State as well).
You're someone who never cashed in options, are you? When you have the options - they have potential value, but no real value until exercised. Then you get to pay income tax on the realized gains of those options (because they are realized in less than 1 year time - you typically exercise and sell on the same day, or at least within a week).
Now, you CAN take out loans against the value of your options, if the options are for publicly traded stocks. But then you're essentially mortgaging your future for payments today, and hope that the value of the stock continues to increase. If it doesn't - you get into really bad financial situations really quick. And even if that's not the case, the loan may be considered as income by the IRS and subject to full income tax.
Then the IRS gets to estimate the value of the housing expense you're given by your corporation, the value of your transportation you're provided by your corporation, and so on. Income isn't just monetary funds; it's any compensation applied for working. So if you live in corporate housing, and have a corporately-owned car - that's compensation that will be taxed.
Because one of the top triggers for an audit is underpayment of taxes. I try to break even, but shade towards a small refund. Been through the grist mill once with the IRS, never, ever want to do it again.
“Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?” - George Carlin. Labeling others idiots and maniacs is micro-aggression! Aggrieved, aggrieved! Ban him, ban him!
Well, posting a bond is basically free - it's simply putting money in a trust account. I can withdraw the bond at any time, and get all the money back. But the point is - no need for insurance, at least in CA.
I don't have to have car insurance unless I want to drive on public roads. And I do not have to insure the value of the car, if I do not want to. And here in CA, I can post a $25K bond and forgo car insurance altogether (bond is the replacement for it).
That's not the question - would Tesla make a profit without the subsidies and credits? If not, then when those credits end (this year) Tesla will find their financial future dramatically changing. Looking at unending years of losses doesn't make stockholders very happy...
On their devices, they control the entire technology stack: from hardware to software, it is all theirs. And they are the only player who has this sort of position that allows paradigm shifts to be done in-house.
Other than Microsoft with an OS and Surface. Or Google with an OS and Nexus devices. Or Samsung with an OS and dozens of different mobile devices. But other than that, Apple is the only play with control of the entire technology stack!
So the best you can do is a paraphrase by a talking head about what he stated. What was his original statement? That's what matters - not what some talking head thought it should be...
I would argue a person should know more about how their car works than their computer. It's enough to know how to USE a computer. But computers don't wear down to bald tires, have bulbs that blow out, leak oil all over, or create other hazardous situations that can lead to actual loss of life. Teach the basics of how to handle food safely (salmonella, anyone?), the basics of car maintenance, and then I'll agree about how a computer works. Until then, knowing how to use it is enough.
Mine? No - I have a "no solicitors" sticker on my porch, and that means you'd be trespassing. But on the sidewalk in front of my house? Feel free! Of course, I assume you'd have no problem with me doing the same in front of your house?
I love how Trump supporters always claim he's been taken out of context, even though the chief reason they love him is because he wants to throw out all the Muslims.
Proof? Where did he state that? Or are you just proving the original poster - you scream and issue charges (that you know are false - libel) in an effort to defeat a person you do not agree with? Methinks it's solidly the latter, as there is zero proof for your claim.
And if that's all Trump had proposed that would be one thing. But let's remember what he wants to do to AMERICAN CITIZENS who are Muslims.
What has he proposed for Muslim American citizens? I've seen plenty of his statements about immigration of Muslims, and travel from non-citizen Muslims, but nothing about US citizens. What is his actual statement - his words - on such a topic?
The reality is that, during the Obama Administration, income inequality has skyrocketed. That follows 8 years of income inequality falling, during the Bush years. Yes, the actual data is different than the oft-quoted meme - and the average working class person experiences that. Things aren't rosy as Obama claims. Income inequality didn't skyrocket during the Bush Administration. The media reported otherwise - and Joe Average knows otherwise. So they immediately discount anything said by the media, and will flock to someone who runs as the antithesis of the establishment and media favorite - Trump.
LOL - like tax rates would be cut? Not a chance! This would just be a reason for the local school district to buy some more "advanced" IT systems, and hire more expensive support staff (not teachers), thus justifying ever INCREASING tax rates in the future because of the bigger non-classroom staff and equipment maintenance.
Algebra and geometry is MUCH better at teaching problem solving skills. Basic word problems that the student solves teaches analysis (what is the problem), logic (how do I structure up a solution), and attention to detail (did I solve the problem correctly). Programming should come AFTER a solid foundation in logic, algebra and geometry (geometry because of the emphasis on equivalents and equalities/comparisons when looking at angles, polygons, etc).
IMHO, K-12 education should be targeted towards providing the student basic life skills, and preparing them for a lifetime of learning in whatever field they choose. The basics about humanities, science, math, language, and the everyday skills of cooking, repair (yes, basic shop should still be around), and balancing a budget/checkbook. Then post-12 grade education - college/university or trade school - should be for your career.
Maybe he's healthy enough that carrying a 4 pound laptop won't leave him winded halfway down the hall. Put down the Twinkies and Mountain Dew, and try the stairs once in a while...
Slashdot Mirror
I think that no matter if you sell the stock or not, the difference between the stock price (when you exercise the option) and the option strike price is always ordinary income.
A lot of people seem very confused about options, but they aren't that difficult. Let's say you have been granted options for your stock at $100. On the day you exercise your option the price of the stock is $120. You pay $100 for the stock, and have $20 of ordinary income. The cost basis for the stock is now $120. If you later sell the stock for $200 you have $80 of capital gains (long-term or short term, depending on how long you hold it).
Correct. You either pay full income tax on the whole thing, OR you hold the stock and sell it later and pay capital gains tax on the accrued value after your got the stock. Bottom line is you always pay at least some income tax, and usually (because few people actually buy and hold the stock) pay income tax on the whole thing, and never get to leverage any appreciation in value as a capital gains tax rate.
No, stock options are almost always taxed as ordinary income. The basis of a stock option is not set until you exercise the option. With a stock option, you own NOTHING. It is simply a promise by the company to sell you stock at some future date at a fixed price - there is no value to you in that promise, until you exercise the option.
When you exercise the option, you then establish a cost basis of an actual item of value (the stock). Since few people have the money to actually buy their stock outright, they tend to sell the stock on the same day as they exercise the option. Cash out, so to speak. And thus actual ownership of the item - the stock - was less than 365 days, and so it is taxed as ordinary income, not long-term capital gains.
Rarely does someone pay capital gains tax on stock bought via a stock option. You have to pay for the option itself up front, then hold it for at least 1 year. Most people don't have hundreds of thousands of dollars lying around - so they exercise the option and sell the stock on the same day. No money out of their product, but the profits are taxed as full ordinary income (and, because of the values, typically in the several hundred thousand dollar range, the majority is at 39% Federal - and in the state of California, usually 12% State as well).
You're someone who never cashed in options, are you? When you have the options - they have potential value, but no real value until exercised. Then you get to pay income tax on the realized gains of those options (because they are realized in less than 1 year time - you typically exercise and sell on the same day, or at least within a week).
Now, you CAN take out loans against the value of your options, if the options are for publicly traded stocks. But then you're essentially mortgaging your future for payments today, and hope that the value of the stock continues to increase. If it doesn't - you get into really bad financial situations really quick. And even if that's not the case, the loan may be considered as income by the IRS and subject to full income tax.
Then the IRS gets to estimate the value of the housing expense you're given by your corporation, the value of your transportation you're provided by your corporation, and so on. Income isn't just monetary funds; it's any compensation applied for working. So if you live in corporate housing, and have a corporately-owned car - that's compensation that will be taxed.
Because one of the top triggers for an audit is underpayment of taxes. I try to break even, but shade towards a small refund. Been through the grist mill once with the IRS, never, ever want to do it again.
I know this is /., but if you RTFS you'd see they won a case against MS for $200 million. I swear, people at /. are getting lazier and lazier...
“Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?” - George Carlin. Labeling others idiots and maniacs is micro-aggression! Aggrieved, aggrieved! Ban him, ban him!
OK, so there was this time that one or more persons may have done something, and one or more other persons had a reaction.
Thank you very much, I'll be here for a duration. Try the soy based meal!
Well, posting a bond is basically free - it's simply putting money in a trust account. I can withdraw the bond at any time, and get all the money back. But the point is - no need for insurance, at least in CA.
I don't have to have car insurance unless I want to drive on public roads. And I do not have to insure the value of the car, if I do not want to. And here in CA, I can post a $25K bond and forgo car insurance altogether (bond is the replacement for it).
That's not the question - would Tesla make a profit without the subsidies and credits? If not, then when those credits end (this year) Tesla will find their financial future dramatically changing. Looking at unending years of losses doesn't make stockholders very happy...
On their devices, they control the entire technology stack: from hardware to software, it is all theirs. And they are the only player who has this sort of position that allows paradigm shifts to be done in-house.
Other than Microsoft with an OS and Surface. Or Google with an OS and Nexus devices. Or Samsung with an OS and dozens of different mobile devices. But other than that, Apple is the only play with control of the entire technology stack!
Because he never said what you - or the other post - claimed. It's a lie. Which is why you cannot source it.
How much profit does Tesla make without the ZEV subsidies and credits added to the bottom line? Is Tesla even profitable at that point?
So the best you can do is a paraphrase by a talking head about what he stated. What was his original statement? That's what matters - not what some talking head thought it should be...
I would argue a person should know more about how their car works than their computer. It's enough to know how to USE a computer. But computers don't wear down to bald tires, have bulbs that blow out, leak oil all over, or create other hazardous situations that can lead to actual loss of life. Teach the basics of how to handle food safely (salmonella, anyone?), the basics of car maintenance, and then I'll agree about how a computer works. Until then, knowing how to use it is enough.
This should be modded "+5 insightful". Bravo sir, bravo! Excellent summary of the SJW position.
Mine? No - I have a "no solicitors" sticker on my porch, and that means you'd be trespassing. But on the sidewalk in front of my house? Feel free! Of course, I assume you'd have no problem with me doing the same in front of your house?
I love how Trump supporters always claim he's been taken out of context, even though the chief reason they love him is because he wants to throw out all the Muslims.
Proof? Where did he state that? Or are you just proving the original poster - you scream and issue charges (that you know are false - libel) in an effort to defeat a person you do not agree with? Methinks it's solidly the latter, as there is zero proof for your claim.
And if that's all Trump had proposed that would be one thing. But let's remember what he wants to do to AMERICAN CITIZENS who are Muslims.
What has he proposed for Muslim American citizens? I've seen plenty of his statements about immigration of Muslims, and travel from non-citizen Muslims, but nothing about US citizens. What is his actual statement - his words - on such a topic?
The reality is that, during the Obama Administration, income inequality has skyrocketed. That follows 8 years of income inequality falling, during the Bush years. Yes, the actual data is different than the oft-quoted meme - and the average working class person experiences that. Things aren't rosy as Obama claims. Income inequality didn't skyrocket during the Bush Administration. The media reported otherwise - and Joe Average knows otherwise. So they immediately discount anything said by the media, and will flock to someone who runs as the antithesis of the establishment and media favorite - Trump.
LOL - like tax rates would be cut? Not a chance! This would just be a reason for the local school district to buy some more "advanced" IT systems, and hire more expensive support staff (not teachers), thus justifying ever INCREASING tax rates in the future because of the bigger non-classroom staff and equipment maintenance.
Algebra and geometry is MUCH better at teaching problem solving skills. Basic word problems that the student solves teaches analysis (what is the problem), logic (how do I structure up a solution), and attention to detail (did I solve the problem correctly). Programming should come AFTER a solid foundation in logic, algebra and geometry (geometry because of the emphasis on equivalents and equalities/comparisons when looking at angles, polygons, etc).
IMHO, K-12 education should be targeted towards providing the student basic life skills, and preparing them for a lifetime of learning in whatever field they choose. The basics about humanities, science, math, language, and the everyday skills of cooking, repair (yes, basic shop should still be around), and balancing a budget/checkbook. Then post-12 grade education - college/university or trade school - should be for your career.
Maybe he's healthy enough that carrying a 4 pound laptop won't leave him winded halfway down the hall. Put down the Twinkies and Mountain Dew, and try the stairs once in a while...