Hi,

I am Indian citizen and was recently transferred by my company from India office to the US office in Oct-2010.

Now about 1 month after arrival in the US I exercised some stock options. When I checked with the broker he told me that my company has paid the tax in India.

So now when I file for taxes in the US will I be Double Taxed ?

If you are single, you will file nonresident tax return. For nonresidents, income from sale of stocks is not taxable.
You can also deduct moving expenses using Form 3903. Your U.S. Tax Return: The U.S. Visas (http://taxipay.blogspot.com/2008/08/us-visas.html)

Thanks for your reply, I wanted to clarify couple of things,

1.) I am not single , I am married and have moved with my family to the US on L1 visa.

2.) When I exercised the stocks option the broker told me the tax will be paid to the Indian govt.

One thing I wanted to know is as I am employed in the US (US employee) shouldn't I pay the tax for all gains here in the US or does that rule come into effect only once I have completed more than 182 days in the US?

Thanks,
Abhiman

Abhiman:

If you exercised the stock options on the stock of your INDIAN company, that income is considered to be Indian-sourced income. That being the case, you wold NOT report it on your tax return if you file as a non-resident alien and file Form 1040NR-EZ.

Now, if you wait until June 2011 and file jointly with your wife, then ALL world-wide income must be reported on your return, to include the option income. In that case, you would claim the Foreign Tax Credit (Form 1116) for the taxes paid to India on the option income.

If you need professional help filing your return, email me at [email protected].