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$670,000 windfall -- ordinary income?

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alexcomp

Junior Member
Alabama

My wife's company is merging with another company, (UDI and BAE). Under the terms of the merger, all of her stock options will vest and immediately exercise for cash at $75 per share. Our heartfelt prayer is that there might be some theory that will allow us to escape ordinary taxation rates on this profit -- perhaps something having to do with the forced nature of the sale.

The $670,000 is not total proceeds -- it is the profit. We had intended to use these stock options as a cornerstone of our retirement strategy, but in a more gradual fashion allowing for taxation at long-term capital gains rates.

Anyone who is able to supply constructive advice which will allow us to shift some or all of this profit from ordinary income taxation rates will be worshiped and possibly compensated.
 



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