Options Trading Tutorial

Question on Long term capital gains tax (in USA)?

I work in the USA. My salary is $66k p.a. I have got the company's shares thro' Employee stock options bought over a period of 3 years. The share value is (1170 shares @ USD 38) $44k now. I stopped purchasing since June '09. I wish to sell all the shares next year around. The gain would be like $15-20k by then I guess. Since, I've been holding it for more than a year, I presume it would be deemed long term capital gain. Could anyone work out the tax amount on this? I am a married guy - my wife not working. Please determine my tax bracket and work out the tax amount. I have been getting different answers, I hope someone clarifies my doubts here. Thanks!! Just to add - I would also want to transfer the sale proceeds (cash) to India when I join work in India next year. Would there be any issues doing so? I hope there wouldnt be any tax in India.

Public Comments

1. Capital gains tax rate is VERY low. The percentage depends upon your total income, and adjustments to it. Maximum rate is 15%.
2. If you sell after June 2010, then yes there will be capital gains and depending on your tax bracket it can be 0% or 15% tax on your gains. Also, just because you figure you will have 15K to 20K in gains now, that does not mean you will have that when you sell your stock options. The market can drop really badly again and you can lose it all or it can rise even higher and you will then therefore have a higher gain. You really need to sit down and talk to a financial and tax advisor on what the best course of action will be for you. HR Block - Tax Advisor I -- ** This advice was prepared based on my understanding of the tax law in effect at the time it was written as it applies to the facts you provided. Click on my profile to read more.**