Posts filed under “Wages & Income”
If you received and exercised stock options, and had to pay taxes on the phantom income, I have got some good news for you:
Buried in the $700b TARP Bailout is this AMT tax amendment:
“Their tax nightmare was created by a provision of the Internal Revenue Code called the Alternative Minimum Tax, or AMT. These tech workers had been granted what’s called an incentive stock option. Under the AMT, these are taxed at the time employees exercise the right to buy them, based on the difference between the grant price and the exercise price. During the dot-com era, when stock prices soared to dizzying heights, employees could have a stock option that was granted at less than a dollar but that he or she exercised at more than $100 a share.”
Granted, this applies to a relatively small pool of employees nationwide — those people who benefit recieve some form of compensation in the form of stock options.
We shall assume that some measure of relief will find its way to the various Wall Street denizens of Bear Stearns, Lehman Brothers, and anyone else who paid income tax on exercised stock that is now worthless — or worth far less — than the excercise price. Granted, this is only a small measure of comfort via the AMT modification, but it may rescue some out of work people lots of money they never should have paid in the first place.
Why this is in the bailout plan, I have no idea . . .
Hat tip: GMSV
Guide to ISO-AMT in HR 1424
Rescue bill offers relief to some valley taxpayers hit with the AMT
Mercury News 11/10/2008 06:36:48 PM PST
Depression era flashback: Remember all of those photos of people looking for work in the 1930s? The sandwich boards that said things like “WILL WORK FOR FOOD” ? Walking to work on Friday (42nd St and Vanderbilt), I bumped into Paul Nawrocki. He is looking for a job in Operations without much success. He got…Read More
Bob Farrell, Merrill Lynch’s now retired dean of Market Strategy, used to say “News doesn’t drive the markets, markets drive the news.” That’s worth keeping in mind in light of the recent slew of bad news: Bleak forecasts from Cisco (CSCO) and General Motors (GM), slumping sales at retailers, state and municipal budget shortfalls. Then,…Read More
One of the things this election will be notable for is how well the Press is using digital media and interactive pages to dissect the issues and polls. I’ve gathered a slew of them and posted them in the Digital Media Tab. Here’s a terrific example: Forget the polls for a moment, and consider instead…Read More
Interesting piece on how mortgage workers were comped during the heyday by John Quigley, titled Compensation and Incentives in the Mortgage Business. It goes a long way to explaining why so many people did such silly things during the boom: They were well paid to do so! A quick excerpt: The incentive structure that arose…Read More
With Congress recognizing the public’s dismay over this massive taxpayer giveaway, we are starting to see some serious questions about the folks who drove the financial ship of state aground. Hence, its time to take a closer look at pay and severance packages for CEOs at investment houses, banks and mortgage lenders, who perversely stand…Read More