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Subject:   Non-qualified options that are under water
Date:   Thu, 20 Nov 2000
From:   David

Hi,

Is there any tax advantage/disadvantage to exercising non-qualified options that are under water?

Regards,

David

Answer

Date:   4 Dec 2000

Hello Dave,

There is no advantage, tax or otherwise, in buying stock for more than its fair market value.

Good luck!

Mike Gray

For more information about non-qualified stock options, request our free report, Non-Qualified Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.