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Posted On: 05/04/2020 10:36:16 AM
Post# of 148870
RE: NP supposedly selling CYDY.
There is another element to this that might be in play -- tax considerations.
I for one have been exercising warrants to: a) provide money to the company; and b) provide the opportunity to lower my tax liabilities based on my expectation of further gains. The same could be true for Nader.
He apparently exercised all his incentive stock options and his warrants. This undoubtedly provides cash to CYDY. Furthermore, it significantly impacts his tax liabilities. If he, like me, expects the stock to continue to climb, then this was a very smart tax move.
It sets his "bargain element" for tax purposes based on the current market price, which is substantially less than he would expect when the price rises in the future. And secondly, it starts the clock ticking for his 1yr holding perion post exercise. The latter means that he could reduce his tax liability from 37% down to 15% (i.e. 22 percentage points lower). This could mean millions of dollars difference in tax liability depending on where the stock prices goes.
Therefore, I am guessing that NP made this move intentionally and under the guidance of his tax lawyer.
Here is a quick overview of ISO tax treatment:
https://turbotax.intuit.com/tax-tips/investme.../L4azWgfwy
There is another element to this that might be in play -- tax considerations.
I for one have been exercising warrants to: a) provide money to the company; and b) provide the opportunity to lower my tax liabilities based on my expectation of further gains. The same could be true for Nader.
He apparently exercised all his incentive stock options and his warrants. This undoubtedly provides cash to CYDY. Furthermore, it significantly impacts his tax liabilities. If he, like me, expects the stock to continue to climb, then this was a very smart tax move.
It sets his "bargain element" for tax purposes based on the current market price, which is substantially less than he would expect when the price rises in the future. And secondly, it starts the clock ticking for his 1yr holding perion post exercise. The latter means that he could reduce his tax liability from 37% down to 15% (i.e. 22 percentage points lower). This could mean millions of dollars difference in tax liability depending on where the stock prices goes.
Therefore, I am guessing that NP made this move intentionally and under the guidance of his tax lawyer.
Here is a quick overview of ISO tax treatment:
https://turbotax.intuit.com/tax-tips/investme.../L4azWgfwy
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