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I'm not sure I am on the correct "D Board" to ask this question. But here goes. Before I retired in 2001 I exercised stock options awarded me by my company. I chose to covert the options into 189 shares of stock. I chose a Transaction Plan known as Cashless/Hold Stock Method. This simply meant that the company held the shares of stock until I either sold them or arranged to have the shares sent to a brokerage account. I was responsible for and paid for the taxable income that came from the conversion. My question is this: Since I own that stock while I was still working can I assume that it is "Earned Income" and does that mean I can put it into a Roth IRA since I also paid tax when the options were exercised?
I am about to exercise more options that will expire on the 15th of December.I'm also not sure of what to do with the stock that will come from this conversion. The options were awarded before I retired, but I am wondering if I can also place these shares in a Roth ? Or does taxable income derived after retirement change things? Confused Yet ? Who's On First ?
I just want to do the right thing and not get the IRS in a lather. They tend to get surly if they think you're getting cute with them but I would also like to be able to invest the money without paying unnecessary taxes if legally possible. Thanks for any light you can shed on this.
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