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Author: uzaname Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75890  
Subject: Investing after retirement Date: 11/29/2006 10:41 PM
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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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Author: Hohum77 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54559 of 75890
Subject: Re: Investing after retirement Date: 11/29/2006 10:58 PM
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I don't know the answer to your question, but you could cross post the question to the Tax Strategies board.



Hohum

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Author: foolazis Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54562 of 75890
Subject: Re: Investing after retirement Date: 11/30/2006 10:18 AM
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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?

Unfortunately, you can't contribute shares of stock to any IRA, Roth or traditional. IRA contributions can only be made in cash. You would have to sell the shares first before contributing to the IRA.

foolazis

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Author: buzman Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54580 of 75890
Subject: Re: Investing after retirement Date: 12/1/2006 7:17 PM
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I strongly suggest that you speak with a professional.

I am one but am not an expert on Stock options.


buzman

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