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Subject:   Question about tax on stock options
Date:   Mon, 11 Jul 2005
From:   Mansi

Hi,

I used to work for a company in San Diego, California and I received stock options from them. I resigned from that company and moved to Washington state, where I now live and work.

I have to exercise the options now. Since I am not a resident of California anymore, is the income from the exercise of the options subject to California tax?

Thanks,
Mansi

Answer

Date:   Mon, 08 Aug 2005

Hello Mansi,

Yes. Since all of the services for which the options were issued were performed in California, all of the income is taxable in California. See FTB Publication 1004. (You can get a copy at www.ftb.ca.gov.)

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

For more information about non-qualified stock options, request our free report, Non-Qualified Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.