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Date:   2 Feb 2009
From:   Julian

Dear Mike,

I am no longer a resident alien because I now live in Singapore and gave up my green card. I want to exercise non-qualified options for services that were rendered when I was living in California for a U.S. company. I no longer have to file U.S. taxes, but would this be a taxable event?

Best,
Julian

Answer

Date:   5 Feb 2009

Hello Julian,

I'm not an expert on tax matters for non-residents of the United States. Based on what you have said, this is U.S. source income and California source income, subject to income tax by the U.S. and California. Your former employer should withhold income taxes relating to the exercise of the options and issue a W-2 for the taxable wages.

Good luck!

Mike Gray

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.