Re: sponsibility

From: Jeff Bone (
Date: Mon Apr 02 2001 - 23:13:33 PDT

Gordon Mohr wrote:

> (I regret directing things back to the personal experience
> of Jeff and I, but in fact this is how the CMGI-Activerse
> transaction worked, at least by my understanding -- and how
> I filed my taxes. I didn't recognize the exchange of private
> Activerse stock for public CMGI stock as a regular tax gain,
> but the day-before exercise of options *did* trigger an AMT
> gain.)

Sorry, yes, this is correct. My example would've been more accurate had the example
party not done that > 1 year pre-transaction exercise --- but I didn't want to get into
the messy (and for me imperfectly understood, as I dodged the AMT bullet) mechanics of
AMT vs. W-2 income vis-a-vis qual and non-qual. (Non-quals gains from exercise at < 1
year going straight to W-2...) Given that the only real material impact of this in the
example was the tax rate paid, it seemed a reasonable subterfuge --- especially as it
conservatively minimized the tax paid. There are folks in the discussion here that are
struggling with the difference between real shares and stock options and derivative
options, I didn't want anyone's cerebral cortex to blow out. ;-)

Hey Gojo, you used Gary for your taxes, too, didn't you?

> Yes. I'm quite amazed that there isn't more talk of immediate
> and/or retroactive AMT tax relief for the (probably thousands
> of) average folks who have paid AMT taxes on gains that were
> never really recognized via a sale -- independent of any other
> stock-restriction-snafus.

Yup. One thing this whole conversation (both on- and off-list) has convinced me of:
the existing system is so completely insanely complicated and poorly understood that
even most very intelligent people, many of whom can and will face this kind of
situation at some point, choose to ignore it.

I really wish I'd started my own education in this whole space about a year
pre-transaction. It's only now, almost 2 years post-transaction, that I'm really
putting together some of the analytical tools to understand the big picture. Oh, I had
my spreadsheets... I just never bothered to explore all the scenarios, the
combinatorics being prohibitive.


This archive was generated by hypermail 2b29 : Sun Apr 29 2001 - 20:25:26 PDT