Status: Currently on H1B, returning to India for good, in April

Will be treated as Resident for 2007 based on substantial presence test ( 183 days in last 3 years).


I've some stock options granted by company, which are vested but I've not exercised yet. I've some ESPP as well, part of which is held for long term.

My RNOR period ends in March 2009.

State of Residence: California.


Now my questions are

1. If I exercise/sell my stock options in later part of 2008 when I am in India, will I be subject to SocialSecurity/Medicare taxes? As far I understood, I am still liable for federal and state taxes - doesn't matter when I sell my options.
2. If I sell the options in early part of 2009 ( before March 2009) - That is the time when I'll be RNOR and will be non-resident for US - Will there be any tax advantages?

3. If I sell after March 2009, I'll be indian resident - what are tax implications? Whom do I need to pay taxes - US or India or both?

Quote:

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Originally Posted by registrar123

Status: Currently on H1B, returning to India for good, in April

Will be treated as Resident for 2007 based on substantial presence test ( 183 days in last 3 years).


I've some stock options granted by company, which are vested but I've not exercised yet. I've some ESPP as well, part of which is held for long term.

My RNOR period ends in March 2009.

State of Residence: California.


Now my questions are

1. If I exercise/sell my stock options in later part of 2008 when I am in India, will I be subject to SocialSecurity/Medicare taxes? As far I understood, I am still liable for federal and state taxes - doesn't matter when I sell my options.
2. If I sell the options in early part of 2009 ( before March 2009) - That is the time period when I'll be RNOR and will be non-resident for US - Will there be any tax advantages?

3. If I sell after March 2009, I'll be indian resident - what are tax implications? Whom do I need to pay taxes - US or India or both?

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Any one knows about this?