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Author: fespy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121099  
Subject: Tax on Stock Options Date: 1/15/2000 11:14 AM
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I am retired from Nynex in NYC and live in New Jersey. I recently exercised some Nynex/Bell Atlantic stock options from a few years ago and when I got my statement it showed they had taken out NY State & City taxes. When I called the company that processed it they said my last work location was in NYC so that is why they took tax out. I feel this is a mistake but can't get an answer from anyone. If it is how do I get the tax money back? And if it is not why should I have to pay? My pension check comes out of NY and they don't tax that. Please help if you can.

Thanks,
Frank
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Author: mathetes Big red star, 1000 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25115 of 121099
Subject: Re: Tax on Stock Options Date: 1/15/2000 2:08 PM
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I am retired from Nynex in NYC and live in New Jersey. I recently exercised some Nynex/Bell Atlantic stock options from a few years ago and when I got my statement it showed they had taken out NY State & City taxes. When I called the company that processed it they said my last work location was in NYC so that is why they took tax out. I feel this is a mistake but can't get an answer from anyone. If it is how do I get the tax money back? And if it is not why should I have to pay? My pension check comes out of NY and they don't tax that. Please help if you can.

If you can't get the company that processed it to reverse the withholding, then your next best course of action would be to file your tax return (did this happen in 1999? If so, you'll be filing tax returns soon anyway). File a return for NY State and City, showing taxes paid and taxes owed ($0 for the latter, presumably), and requesting a refund from New York.

mathetes

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25124 of 121099
Subject: Re: Tax on Stock Options Date: 1/15/2000 4:30 PM
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<< I am retired from Nynex in NYC and live in New Jersey. I recently exercised some Nynex/Bell Atlantic stock options from a few years ago and when I got my statement it showed they had taken out NY State & City taxes. When I called the company that processed it they said my last work location was in NYC so that is why they took tax out. I feel this is a mistake but can't get an answer from anyone. If it is how do I get the tax money back? And if it is not why should I have to pay? My pension check comes out of NY and they don't tax that. >>

You owe New Jersy, not New York. If you still have unexercised options, make sure the company's records are updated so you don't have this problem again.

"Recently" could have been this year or 1999. If it was 1999, you'll have to file NY and NYC returns to get your refund. Also, don't forget to include the income on your New Jersy return.

If this is a 2000 transaction, the company can fix it if they do so by the end of the year.

Phil Marti
Tax Preparer

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Author: fespy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25184 of 121099
Subject: Re: Tax on Stock Options Date: 1/16/2000 5:25 PM
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Thanks for the info. I exercised in late 1999 so I will have to submit a NY return to get the money back. I was also told that I should submit a NY return with $0 as income and show only the taxes paid. The refund would then be for the total tax withheld. Is this the correct way to go? Appreciate your help.

Frank

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25186 of 121099
Subject: Re: Tax on Stock Options Date: 1/16/2000 6:22 PM
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<< Thanks for the info. I exercised in late 1999 so I will have to submit a NY return to get the money back. I was also told that I should submit a NY return with $0 as income and show only the taxes paid. The refund would then be for the total tax withheld. Is this the correct way to go? >>

Assuming that you had no NY taxable income, yes. You may want to check with them to see if they have a special form for this purpose. DC had one, since there was so much erroneous withholding based on employers' (usually the Federal government) erroneous assumption of residence.

Phil Marti
Tax Preparer

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Author: fespy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28750 of 121099
Subject: Re: Tax on Stock Options Date: 2/15/2000 3:13 PM
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Phil,
Thanks for your help but I recently learned that in Nov 1995, the NY Court of Appeals ruled that non-residents receiving stock options, even when retired must declare the tax in NY in addition to their home state. I got a copy of the document TSB-M-95-(3)1. I have another question concerning the handling of the stock options on my federal return that I hope you can answer. Because I exercised my options using a cashless method, I had to sell shares of stock. I received a W-2 from Bell Atlantic showing the income and taxes taken out but also received a 1099-B from the company that handled the exercise. My question is what do I do with these documents? Do I enter the W-2 amount as income on line 7, 1040 with applicable taxes taken or do I enter the amounts on a schedule D. Or do I enter it in both places, but that doesn't make sense. I appreciate any help.

Thanks,
Frank

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