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Table of Contents

• Correction – refundable minimum tax credit expiration
• Thanks to those who worked for AMT tax relief
• Telephone seminar on AMT Relief Legislation
• Live seminar on AMT Tax Relief
• Do you know about our other newsletters?
• IRS Circular 230 Disclosure
• Consult with a tax advisor
• Telephone seminar flyer
• Live seminar flyer
• Subscribe to Michael Gray, CPA's Option Alert

Correction – refundable minimum tax credit still scheduled to expire

I made an error on the last newsletter. The refundable minimum tax credit is still scheduled to expire after 2012.

Hopefully, it will be extended as part of the "AMT patch" – the annual adjustment of the AMT exemption amounts – in the future. (There’s this matter of the Federal budget…)

The legislation said it was effective for tax years after 2007, but the section defining the "sunset date" wasn’t repealed.

Rats! Sorry for the screw-up.

Thanks to Joshua Lehrer and Kaye Thomas who pointed this out to me. By the way, Kaye Thomas also writes about employee stock options. He wrote a great book, Consider Your Options, and has a web site at www.fairmark.com.

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Thanks to those who worked for AMT tax relief

I received some great emails from Tim Carlson, President of the Coalition for Tax Fairness, and Angela Hartley with Reform AMT about the process they went through to get this legislation enacted. They have agreed to be my guests to share their experiences in a telephone seminar on October 30.

It was an eight-year grassroots effort with the cooperation of many representatives in Congress. A few individuals donated significant financial support.

This was an educational process to get the message through to Congress that this wasn’t a measure favoring "fat cats," but that many American families were financially devastated by an unfair tax system.

Our thanks to everyone who was involved in this effort.

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Telephone seminar on AMT Relief Legislation

There will be a 90-minute telephone seminar on the AMT Relief Legislation at 1 p.m. Pacific Time on Thursday, October 30, 2008.

Tim Carlson, President of the Coalition for Tax Fairness, and Angela Hartley with Reform AMT will talk about why relief was necessary and how it was passed.

Then Michael Gray will explain the relief measures.

Then we will open up the lines for questions and answers.

A flyer is included with this newsletter, or call Dawn Siemer weekday afternoons at 408-918-3162 for details and registration.

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Live seminar on AMT Tax Relief

If you live or work in the San Jose, California area or will otherwise be in the area, Michael Gray will be leading a lunchtime seminar at Hobee’s restaurant in Campbell, California from noon to 1:30 p.m. on Friday, November 7, 2008.

A flyer is included with this newsletter, or call Dawn Siemer weekday afternoons at 408-918-3162 for details and registration.

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Michael Gray regrets he can no longer answer emails personally. He will answer selected questions in this newsletter.

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Do you know about our other newsletters?

For general tax developments, tax planning ideas, business development ideas and book reviews, subscribe to Michael Gray, CPA's Tax & Business Insight.

We are now offering our real estate tax newsletter, Michael Gray, CPA's Real Estate Tax Letter, free of charge. Like this newsletter, we will talk about new developments, have reports on special tax concerns, and answer questions and answers. To subscribe and read a sample issue, visit realestatetaxletter.com.

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IRS Circular 230 Disclosure:

As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this communication 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.

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Consult with a tax advisor

For our readers who aren’t tax advisors, this newsletter is intended to alert you about tax issues that could affect you. It is not a substitute for advice from a professional tax advisor. You will find that getting advice from a qualified advisor is a worthwhile investment.

Tax advisors should view the newsletter as an alert to become aware of issues relating to employee stock options for further research and study.

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Subscribe to Michael Gray, CPA's Option Alert!

To receive the next issue of Michael Gray, CPA's Option Alert with more employee stock option tax developments and answers to questions from our readers automatically via email, subscribe by filling out the form below.

(Michael Gray is the author of Secrets of Tax Planning For Employee Stock Options, Stock Grants and ESOPs.)

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Alternative minimum tax abatement and
refundable minimum tax credits expanded

Telephone Seminar

4:15 p.m.

They are the "fallout" from the Dot Com Crash during 2000 and 2001.

People who exercised incentive stock options and found they had a federal alternative minimum tax liability they will never be able to pay. They have been through eight years of hell trying to negotiate with IRS collection officers who have refused to accept their offers in compromise of their tax liabilities or working off payment plans.

People who dutifully paid their alternative minimum tax liabilities, and had given up hope of ever being able to recover them as minimum tax credits.

Your cries have been heard!

After eight years of undying patience by volunteer organizations like Reform AMT and the Coalition for Tax Fairness, tax relief that will really help has finally been enacted, effective in 2008.

Certain unpaid tax liabilities and related penalties and interest have been abated. You no longer owe them!

Severe limitations on refundable minimum tax credits have been eliminated, so if you have minimum tax credits that are more than three years old, you will receive a tax benefit for them starting 2008! (The refundable minimum tax credit is still scheduled to expire after 2012.)

Come find out the details at this live lunchtime seminar by Michael Gray, CPA, who writes Michael Gray, CPA’s Option Alert and is also the author of Secrets of Tax Planning For Employee Stock Options, Stock Grants and ESOPs, Second Edition and the Employee Stock Options – Executive Tax Planning, 2008 Edition.

Michael Gray is a certified public accountant who has worked continuously in tax practice since 1974. His tax practice has been largely devoted to helping people with problems related to employee stock options.

When Michael Gray has an initial consultation meeting with a client, the fee usually ranges from about $410 to $820.

The investment for participating in the telephone conference is $97, plus the amount your long distance provider charges for the long distance service. If your long distance rate is 7 cents per minute, that would be about $6.30.

When we have offered live seminars, many people mentioned problems with the location, etc. This is a way for you to participate from a location that is convenient for you.

In addition, when you register for the seminar, you may request a CD of the teleconference to study at your convenience for $10.

Please fax or mail the enclosed form so that we receive it no later than October 23, 2008 and we will send you the telephone number to call.

Unconditional Guarantee

You must agree this telephone conference has been a valuable experience for you or we will immediately issue a refund check for your investment.

I’m looking forward to helping you with your questions relating to employee stock options!

May your options increase in value!

Michael C. Gray
mgray@stockoptionadvisors.com

P.S. Be sure to participate in this timely telephone conference presentation about alternative minimum tax liability abatement and refundable minimum tax expansion Thursday, October 30 at 1 p.m., Pacific Time. Will you benefit from this tax relief legislation? Come find out! Remember, there will be a 30-minute question and answer session when you may have an opportunity to have your burning question answered. Your investment is unconditionally guaranteed. Complete and return the registration form today!

© 2008 Michael C. Gray

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Praise for Michael Gray’s advice on stock options

"During the tech boom, Silicon Valley workers had surprisingly few places to turn for help with their stock options. Mike Gray was one of them, providing an authoritative voice of prudence in a time of irrational exuberance. Steeped in the complexities of tax laws and strategies, he was among the first to co-author a primer to help workers understand how options worked and how to take money off the table. Secrets of Tax Planning delves much deeper, providing detailed explanations that should serve as a helpful resource for tax pros, investment managers and financial planners – and undoubtedly a few do-it-yourself engineers."

Mark Schwanhausser
Personal finance reporter
San Jose Mercury News
San Jose, California

"Mr. Gray really knows his stock options and he is an expert with ‘AMT’ – Alternative Minimum Tax. Mr. Gray helped me receive a $94,988.00 credit towards my tax liability. The savings in penalty, interest, and stress are worth much, much more – Thanks a $ Million!"

–John Simon

"I contacted Michael Gray on April 12 of this year (2007) out of desperation. I had a somewhat complicated situation with stock options that were exercised in 2005 and flipped in 2006 resulting in an early disposition of qualifying options. I had given my papers to a local CPA who gave me the news that I owed the IRS a large mortgage for the transaction with an overall tax rate of over 70% for the options. I then took my papers to a top notch national CPA firm who had their top tax researchers give me the same unbelievable news. An internet search turned up Michael’s firm as stock option experts, and after emailing documents to him, he called me with the news that I in fact was getting a refund because of the early disposition, and had my extensions prepared before the April 15th deadline. Advice, service and client relationship are unsurpassed. If you have ISOs that you are considering exercising, contact an expert such as Michael Gray before you choose to exercise them."

-- Bob Kalish

"To Whom It May Concern:

I first met Mike Gray in 1999 to ask his assistance with stock option tax issues. Little did I know back then that over the next few years, Mike would help me with a hairy tax documentation problem, help my wife and me set up our will, provide me with advice on starting my new company, and become our company tax advisor. Along the way, Mike has provided me with excellent legal contacts and even sales reference materials.

Adding it all up, you soon realize that Mike is much more than just a CPA – he is a very knowledgeable advisor and guide in all facets of our financial life. I’m very glad to count Mike Gray as one of my most trusted advisors.

Dean Haritos
President
Cloudbreak Software, LLC"

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Registration Form

Yes! Sign me up to participate in your "Alternative Minimum Tax Abatement and Refundable Minimum Tax Expansion" telephone conference. I want to learn find out if I can benefit from this major tax relief legislation.

The telephone conference will take place at 1 p.m., Pacific Time on Thursday, October 30, 2008. The presentation will last about 60 minutes, followed by 30 minutes of questions and answers. My investment for the telephone conference is $97. Guarantee: I must agree this is a valuable conference experience or you will immediately issue a 100% refund.

You will provide the call-in telephone number to me in advance of the telephone seminar date.

Name ___________________________________________________

Company Name ___________________________________________

Address _________________________________________________

City ________________________ State ______ Zip ______________

Home Phone _________________ Business Phone _______________

FAX ___________________ Email ___________________________

_____ In addition to attending the telephone conference, send me a CD of the telephone conference. ($10.00 plus $1.50 shipping and handling and $ .95 sales tax for California residents.)

_____ I can’t attend the telephone conference. Please send me a CD of the program. ($97.00 plus $1.50 shipping and handling and $8.13 sales tax for California residents.

_____ Payment is enclosed (mail orders only)

_____ Charge my Mastercard ____ Visa ____ American Express ____ Discover _____

Credit card number ________________________________________

Expiration __________ Security code __________

Card billing address, if different ______________________________

________________________________________________________

Name on card ________________________________

Signature ____________________________________

FAX to 408-998-2766

or mail to Michael Gray, CPA
2190 Stokes St., Ste. 102
San Jose, CA 95128-4512
© 2008 Michael C. Gray

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Alternative minimum tax abatement and
refundable minimum tax credits expanded

Live Seminar

They are the "fallout" from the Dot Com Crash during 2000 and 2001.

People who exercised incentive stock options and found they had a federal alternative minimum tax liability they will never be able to pay. They have been through eight years of hell trying to negotiate with IRS collection officers who have refused to accept their offers in compromise of their tax liabilities or working off payment plans.

People who dutifully paid their alternative minimum tax liabilities, and had given up hope of ever being able to recover them as minimum tax credits.

Your cries have been heard!

After eight years of undying patience by volunteer organizations like Reform AMT and the Coalition for Tax Fairness, tax relief that will really help has finally been enacted, effective in 2008.

Certain unpaid tax liabilities and related penalties and interest have been abated. You no longer owe them!

Severe limitations on refundable minimum tax credits have been eliminated, so if you have minimum tax credits that are more than three years old, you will receive a tax benefit for them starting 2008! (The refundable minimum tax credit is still scheduled to expire after 2012.)

Come find out the details at this live lunchtime seminar by Michael Gray, CPA, who writes Michael Gray, CPA’s Option Alert and is also the author of Secrets of Tax Planning For Employee Stock Options, Stock Grants and ESOPs, Second Edition and the Employee Stock Options – Executive Tax Planning, 2008 Edition.

Here are the details:

Date: Friday, November 7, 2008
Time: noon to 1:30 p.m.
Place: Hobees Restaurant at The Pruneyard in Campbell. (1875 S. Bascom Ave., next to the Camera Theaters in the back of the shopping center.) 408-369-0575
Investment: $97 per person. (Visa, Mastercard, American Express or Discover cards accepted. Make any payments to "Michael Gray, CPA.")
Lunch is included!

Guarantee: You must agree this is a valuable seminar experience or we will immediately issue a check for a 100% refund.

Please take action on this notice now. Seating is limited to 35.

FAX the registration form to us at 408-998-2766 today or call Dawn Siemer at 408-918-3162 on weekday afternoons to make your reservation.

I'm looking forward to seeing you at the seminar!

Michael C. Gray

P.S. Congress has enacted the most significant change for incentive stock options since it enacted the alternative minimum tax in 1986, effective this year! Come get the "good news" about the abatement of tax liabilities and how you can now benefit from minimum tax credits that were previously "locked up." Send in your registration form for the "Secrets of Tax Planning For Employee Stock Options Seminar" today!

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Praise for Michael Gray’s advice on stock options

"During the tech boom, Silicon Valley workers had surprisingly few places to turn for help with their stock options. Mike Gray was one of them, providing and authoritative voice of prudence in a time of irrational exuberance. Steeped in the complexities of tax laws and strategies, he was among the first to co-author a primer to help workers understand how options worked and how to take money off the table. Secrets of Tax Planning delves much deeper, providing detailed explanations that should serve as a helpful resource for tax pros, investment managers and financial planners – and undoubtedly a few do-it-yourself engineers."

Mark Schwanhausser
Personal finance reporter
San Jose Mercury News
San Jose, California

"To Whom It May Concern:

I first met Mike Gray in 1999 to ask his assistance with stock option tax issues. Little did I know back then that over the next few years, Mike would help me with a hairy tax documentation problem, help my wife and me set up our will, provide me with advice on starting my new company, and become our company tax advisor. Along the way, Mike has provided me with excellent legal contacts and even sales reference materials.

Adding it all up, you soon realize that Mike is much more than just a CPA – he is a very knowledgeable advisor and guide in all facets of our financial life. I’m very glad to count Mike Gray as one of my most trusted advisors.

Dean Haritos
President
Cloudbreak Software, LLC"

"Mr. Gray really knows his stock options and he is an expert with ‘AMT’ – Alternative Minimum Tax. Mr. Gray helped me receive a $94,988.00 credit towards my tax liability. The savings in penalty, interest, and stress are worth much, much more – Thanks a $ Million!"

–John Simon

"I contacted Michael Gray on April 12 of this year (2007) out of desperation. I had a somewhat complicated situation with stock options that were exercised in 2005 and flipped in 2006 resulting in an early disposition of qualifying options. I had given my papers to a local CPA who gave me the news that I owed the IRS a large mortgage for the transaction with an overall tax rate of over 70% for the options. I then took my papers to a top notch national CPA firm who had their top tax researchers give me the same unbelievable news. An internet search turned up Michael’s firm as stock option experts, and after emailing documents to him, he called me with the news that I in fact was getting a refund because of the early disposition, and had my extensions prepared before the April 15th deadline. Advice, service and client relationship are unsurpassed. If you have ISOs that you are considering exercising, contact an expert such as Michael Gray before you choose to exercise them."

-- Bob Kalish

---

Registration Form

Yes! Sign me up to participate in your "Secrets of Tax Planning For Employee Stock Options" luncheon seminar. I want to learn how to get the maximum tax benefits from my options under the tax laws while avoiding expensive tax traps.

Here are the details:
Date: Friday, November 7, 2008
Time: noon to 1:30 p.m.
Place: Hobees Restaurant at The Pruneyard in Campbell. (1875 S. Bascom Ave., next to the Camera Theaters in the back of the shopping center.) 408-369-0575
Investment: $97 per person. (Visa, Mastercard, American Express or Discover cards accepted. Make any payments to "Michael Gray, CPA.")
Lunch is included!

Guarantee: I must agree this is a valuable seminar experience or you will immediately issue a check for a 100% refund.

Name ___________________________________________________

Name(s) of other person(s) attending __________________________

________________________________________________________

Company Name ___________________________________________

Address _________________________________________________

City ________________________ State ______ Zip ______________

Home Phone _________________ Business Phone _______________

FAX ___________________ Email ___________________________

_____ Payment is enclosed (mail orders only)

_____ Charge my Mastercard ____ Visa ____ American Express ____ Discover _____

Credit card number ________________________________________

Expiration __________ Security Code __________

Card billing address, if different ______________________________

________________________________________________________

Name on card ________________________________

Signature ____________________________________

FAX to 408-998-2766
Call Dawn Siemer at 408-918-3162 on weekday afternoons
or mail to Michael Gray, CPA
2190 Stokes St., Ste. 102
San Jose, CA 95128-4512

© 2008 Michael C. Gray

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