CMKM Diamonds Inc. (fka CMKX)

[roadhog95]

HELPFUL TAX INFORMATION: US capital gains tax rates:

Explains Capital Gains fairly clearly
http://www.bankrate.com/brm/itax/tips/20010305a.asp


List of the 2004 US tax income brackets (these determine what youll pay on capital gains):
http://www.bankrate.com/brm/itax/2004taxrates.asp


So here we have the scenario of:

1. 5,000,000 shares CMKX (purchased in June 2004)
2. PPS reaches .95 in 4 months (from June)
3. Current equity = $4,750,000.00


That means:

4,750,000.00 - (4,750,000.00 * .35) = $3,087,500.00

$3,087,500.00 is your take home. No way around that. (it is BS i agree..insert your choice of government slandering expletives)

Accourding to the 2004 tax income bracket sheet, income of $319,101 or above gets taxed @ 35% (if you hold the securities for LESS than 366.. .. if you hold for this period or higher, you get taxed @ 15%). I am pretty sure however that a person who reaches their preferred liquidation PPS is going to sell off and not worry about cap gains tax even if they have held less than 366 days (who the hell knows if that particular PPS will last another few weeks much less the remainder of the holding period.. and who wants to take the chance??)

Obviously, the more shares you own (particularly you folks in the hundreds of mill share range) the less you'll care about your tax rate..Oh to be one of those people with hundreds of mill of shares! Id love to not have to blink twice @ cap gains..

Anyway.. hope this is helpful to someone. GLTA

-=hog