Headlines today described a provision added to the federal bailout bill that will rebate the huge sums that many Valley workers owed the IRS on "phantom income", never collected when they exercised certain types of stock options at the time the dot com bubble burst.
I thought of clients of mine who were caught in this trap. They were forced to sell their dream home and move into a rental when they discovered that they owed the government taxes on the amount that they could have collected at the time the options were exercised. This family had just remodeled the kitchen and enrolled their daughters in local schools when this provision of the alternate minimum tax hit them. To top it off, he lost his job...another bonus from the Internet bubble's bursting. I remember that the wife was near tears every time I saw them.
I hope that this windfall will create a college fund for the girls and partially make up for the misery they felt when they lost their home.
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