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tax help with stock options

C

cougar78

Platinum Member
I have some options that I want to cash in, price is right on the stock. Thing is I want to try to turn it into something else that won't have the capital gain tax attached to it, if I were to just cash in the options, then be taxed for that money as income at the end of the year.

So is turning it into a Roth IRA my best option? Or to avoid the capital gain do I need to buy out the options convert them to stock and then sell off the stock and invest it into something like a IRA.
 
What kind of options?
Qualified or Non-Qualified?
What is the exercise price?
What is the market price?
 
If you are doing a sameday exercise/sell then the profit it will just be treated as regular income, there shouldn't be any additional taxes on it, but it may cause an AMT depending on you current income. When I did this with my options it was just added to my W-2 as regular income.

If you have already exercised them then things will be different depending on what type of option they are and how long you have held them.

 
To JS80,
stock options
I don't know if they are qualified or non
exercise price-10.84
current stock price- 22.23

From my understanding, when cashing stock options given by the company they are classified under the capital gain tax(was wrong about gift tax).
 
I've had the options for almost 2 years I think, so I should be safe from being penalized for the early cash in.
 
I am not an expert.
Since this is a company stock option you may have other selling limitations there.

As to capital gains, if you qualify for it ,(? 15% now) it is not additionally taxed as income. It's one or the other on the tax forms at the end of the year. If your annual income has varied and there is alot of money involved it may affect wheather you should pay quarterlies or not to avoid penalties.
I am not an expert.

Jim
 
Originally posted by: cougar78
To JS80,
stock options
I don't know if they are qualified or non
exercise price-10.84
current stock price- 22.23

From my understanding, when cashing stock options given by the company they are classified under the capital gain tax(was wrong about gift tax).
Click to expand...

If you exercise and sell within 1 year, you will have to pay at your ordinary marginal tax rate on the NET GAIN. If you exercise and keep it for 1 year or greater, you pay 15% on the NET GAIN.
 
Turbo Tax, shockingly, does handle this stuff. As long as it's options from your employer

Turbo Tax, shockingly, doesn't handle options if you are a trader of options. Totaly sux.
 
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