orangetrader <orangetrader[at]hotmail.com> wrote:

- quote -

You say the FMV is $4. How was this value determined?

Either it is the FMV or it is a mythical figure, and the
bargain element -- the amount added to your W-2 as wages --
cannot be determined.

If FMV is $4 then regardless of a public market, someone
must be willing to pay $4. So your taxable BE is $2.

Your cost basis for calculating eventual gain is $4.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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"orangetrader" <orangetrader[at]hotmail.com> writes:

- quote -

Yes.

- quote -

Doesn't matter.

- quote -

The value really *is* there -- if you really believed
the value wasn't there, you wouldn't be exercising
the option, now would you?

- quote -

It will be wage income and included in Box 1 of your W-2
just like your cash wages.

- quote -

(1) There's nothing you can do. The law is quite clear
on how exercise of NQOs is taxed.
(2) It does have real value and your actions should you
obviously believe it does.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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I have some unqualified stock options to exercise.

Assume the option price is $2 and the FMV is $4 and I have
100 shares, I have to pay $200 to exercise. But I will also
be taxed on a presumed $200 of "income"? even though the
company is not publicly traded and thus the value is really
not there.

But will this $200 become part of the W2 as income or part
of capital gains or something else? Where will it show up
in my tax form? Any idea how to reduce having to pay for
this tax since the stock as of how have no real value.

Thanks,

O

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