Subject: ISO-AMT, HR 3385 & All children deserve the best education possible and no child should be left behind!!! Comment: Janine Valdivieso, 48, I grew up in Southern California, and now work as a Child-Support Collections Officer in North-Eastern CA. Married, with three daughters and living in the Auburn area. After we were married, my husband, Joe, and I began saving for college tuition for our two youngest daughters, and setting aside money for our retirement fund. Most of my life, I was a Correctional Officer for various government agencies. It wasn't until August 1999, when I was offered a job at Symyx, that I made the decision to enter the private sector. As a part of my overall compensation, I was granted incentive stock options (ISOs), and like many others, hoped it would some day offer my family a little better financial future. I accepted a lower salary then I had wanted, because my company offered me ISOs. Myself and my husband Joe (who worked for Sandisk) were told by our employers that we would not be impacted by alternative minimum tax (AMT), as long as we held on to the stock, (congresses intent too) and did not sell during the same year; information that would prove to be both incorrect and financially devastating. We both followed that advice, and purchased our shares as they vested throughout the year. One transaction in particular was especially damaging. The option, or strike price, was around $3, but the company stock closed that day at $94. The alternative minimum tax is assessed based on the difference between the price we paid for the options and the fair market value, or closing price, on that same day. By the end of the year, even though it was a paper profit only, for which we did not actually sell any of those shares, the Valdivieso's owed tax in the amount of $100,000 in addition to the almost $25,000 in regular tax we paid throughout the year, an amount greater then our combined annual income. To pay the AMT, we had to sell most of our stock, at a much lower price than what we were taxed on. We also had to sell all of the stock in our retirement funds, and cash-in their girl's college tuition savings. Meanwhile the AMT overpayment sits as an interest-free loan with Treasury while we are out our 100K retirement savings and college funds! This makes NO logical sense, what so ever!!!! Our main concern right now is coming up with the funds to pay for our daughter's tuition at State college next year. And now, in our forties, we have to start all over on our retirement !! Won’t you please support HR 3385 and turn what is now a lifetime interest-free loan to the government to a JUST a 9YR INTERST FREE LOAN. Please return our AMT overpayment ASAP, all children deserve the best education possible and no child should be left behind!!! Valdivieso Family CA 4th Congressional District |