Furthermore, either regular income tax or alternative minimum tax may be payable at the time of exercise, even if the underlying stock is subsequently sold at a loss.

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In a progressive tax system, that also means that the amount of tax payable will be smaller since tax rates tend to decrease with taxable income (with some exceptions, of course).

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Tax is payable only when the income is withdrawn from the trust by the non-charitable beneficiary.

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Above that no more is payable so that rate really is the 13% income tax rate.

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