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Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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stock options granted in 2002-2003 were exercised in 2008.

Resolved Question:

stock options granted in 2002-2003 were exercised in 2008. gain was reported on w-2 for 2008. I am retired and receiving Social Security. Just got a letter from SS that they overpaid me during 2008 because of the way the options were reported. We file joint and this also effects wife benefit. They claim overpayment of $ 2,638 for me and $ 741 for wife. Reported gain was $ 20,321. Our SS benefits for 2008 were $ 28,080. We had other income in the form of IRA distributions. Because options were granted in 2002-2003 do I have to claim all of the gain for 2008?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
HelloCustomer

The gain must be reported in the actual year that the stock options were exercised. There are no choices to spread the gain out over more than one tax year, and it is not dependent on the year or years when the stock options were granted.

Just for your future reference, IRA distributions would have no affect on the SS benefits you receive, but the exercise of stock options would potentially affect the benefits you receive.

Thank youCustomer and let me know if you have more questions.

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