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Need Savings Advice

Discussion in 'Money Matters' started by Caughtinbetween, Jun 24, 2019.

  1. Viswamitra

    Viswamitra IL Hall of Fame

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    Dear Caughtinbetween,

    Vested shares are considered as salary income for the year in which it vests and become taxable if you sell the shares and hence attracts regular federal taxes. The company generally ask for strike price or cost for the options and that is deductible from the amount for which shares were sold. If the vesting and sale happens simultaneously, since the shares were not held for more than 12 months, it becomes short term capital gains like regular income. If the shares vest and you pay only taxes and retain for more than 12 months, then, the sale consideration at the time of sale becomes long term capital gains like any other shares.

    Now, there is a different tax opinion on vesting. Some have the view, the strike price once paid to the company, the shares are not taxable until it is sold as capital gains arises only when you sell shares. There is another tax opinion that says since shares are issued by the company to you (which itself is considered as sale of shares at discounted price) at the time of vesting when you pay the strike price, the difference between market price and strike price paid by you to the company is deemed as value of the shares and you will be liable to pay taxes as short term on entire shares transferred to you.
     
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  2. jayasala42

    jayasala42 Finest Post Winner

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    Regarding Real estate prices in India,especially in Chennai, there was a boom 2000 to 2012.. But the increase is not in the same proportion and prices have started dwindling.Now they say'it is buyer's market'.Many constructed flats remain unsold because of GST complications.
    One can have the satisfaction that the flat purchased by them is worth 5 times of the price.Once we start the process of selling, we know the difficulties about depreciation, indexed cost etc etc.If NRI s sell the property they have to pay nearly 22% IT from the source,leave alone calculation of Capital gains.The period of Investment in notified bonds also has been increased from 3 yrs to 5 yrs with a meagre interest of 5% or so.
    Putting two and two together,all assets become our liabilities as we grow old( Some say that applies to children also, whom we consider as the best assets)Some of the financial decisions which we think that are apt and wise at the time of deciding, turn out to be too stupid as times and circumstances change.
    After 70, all senior citizens are advised to keep their investments in easily encashable mode..
    I wonder what 'wisdom' denotes in financial management ,in the world of changing trends.
    jayasala42
     
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  3. Caughtinbetween

    Caughtinbetween Silver IL'ite

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    Thank you @Viswamitra uncle for explaining it in detail. It helps to further clarify my doubts . I have to further check with the company but my guess is that they go with the last point you mentioned here :

    Thank you.
     
  4. Caughtinbetween

    Caughtinbetween Silver IL'ite

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    Thank you @jayasala42 mam for your response .
    This is so true :
    I might not be very regular in giving my feedback but I want to take this chance to tell you that I admire all your life's wisdom that you share in your snippets . They are very heartwarming to say the least. Thank you.
     

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