babybearmm

well... you can think this way: this is actually a loss:
the company gets money from option exercisers and buy the same number (shares) of stocks. cash inflow is lower than cash outflow, so it's a loss, and the amount of loss is reflected in the income statement and tax return.

When the company files the tax return, it should calculate the taxable income. Due to the loss discussed above, the taxable income is lower, and therefore income tax (in tax return) is lower by the same amount. See? here is "tax benefit" due to loss.

个人理解供参考，如果不对请老师指教，谢谢。

回复  cpaking23


  Does the tax benefit come from the extra money that the company has to pay to b ...
halfprince 发表于 2012-5-9 21:33