jt wrote:
- quote -

What I meant is that their source for an "answer" is generally going to
be the publications and instructions, rather than going deeper to find
an answer. And if an issue isn't covered in one of those, the tax
software isn't going to deal with it.

And it's also important to note, in what I thought was a great one liner
that I believe I found years ago in an old FAQ for a usenet group, IRS
and state publications do have the bias of their author <grin> . That
is, a publication may not indicate there's some disagreement on the
treatment of the item in question, or even that the courts seem to be
coming down on the "other" side of the issue.

Finally, sometimes there's a real problem of how you should read a
publication or, by extension, tax software guidance. You *cannot*
expand it beyond its clearly literal meaning. A good example of that
was found in the divorced parents issue and whether a copy of the
divorce decree could be used in lieu of the IRS form. The IRS
instructions implied that the decree could be used in far more
situations than the regulations allowed it to be used--and taxpayers
found out, to their dismay, that the IRS isn't bound by the
instructions, and certainly not by an *interpretation* of their
instructions, even if it appears to be a reasonable one.

That said, I agree professional advice is a cost/benefit issue. If we
are talking $100 of option income, it's probably best just to report it
and not worry about whether or not its taxable. But if we're talking
$500,000 of option income, then consulting with a professional who knows
Oregon tax seems to make a lot of sense <grin> , at least to make sure
you aren't making a gift to the state of Oregon by reporting the income
to them.

As well, professional tax advice is almost always far more valuable if
obtained *before* the end of the year and before you undertake a
transaction than if consulted after the fact or after year end.
Generally the best result can be obtained when a professional can help
control exactly what will take place rather than when he/she has to deal
with what has happened as a given and then work from there.

For instance, *when* you exercise an option can be very important. For
a case of someone who managed to exercise his option at exactly the
wrong time and got nailed for state tax because of it, see the Arizona
case of Kocher v. Department of Revenue at
http://www.cofad1.state.az.us/opinio...X/TX030002.pdf.

--
Ed Zollars, CPA
Phoenix, Arizona

--
Ed Zollars, CPA
Phoenix, Arizona

Ed Zollars wrote:
- quote -

A conflict of interest needn't impose a gag order; I'm sure everyone
would appreciate you making the caveat and coming out with all barrels
blazing. I'm also skeptical of such state software products
(especially for esoteric issues), but keep in mind the price of pro
advice may exceed the entire dollar amount of just assuming the worst
(safest) case and considering everything taxable. Hopefully the loss
of job resulted in lower tax bracket afterall.

- quote -

Not turbotax for my state! You don't at all look at instructions or
forms; rather it boils it down to a dialog of essential questions that
are dynamically shaped by your answers. If doing it yourself for a key
issue, I might try this in addition to researching the sometimes
baffling forms. Turbotax hopefuly had someone who could interpret
tax-speak better than me.

I normally do like to understand the root issues rather letting
software crunch it up, but besides being difficult in my illiterate
state, that can be bad for your blood pressure. An example involving
Texas occured when I moved away from there midyear and cut my income to
a pittance. The arrival state still puts me in a sky high bracket
because it extrapolates the Texas income, yet no tax credit is possible
due to no income tax in TX. Ignorance can be more blissful...

"Ed Zollars" was helpful in providing:
- quote -

I'm really glad that I found this newsgroup. I can see that this will be a
place to learn a lot of good financial factoids as I frequent the group. I
appreciate each of you who replied.

Ed, hats off to you, especially. It looks like (from the info that you
pointed me to) that I'll have to pay Oregon taxes on the proceeds of my
stock options. I have no idea as to how to determine if that is still good
law, but I am grateful for you pointing it out.

Larry
'the Oregon treasurer will no doubt be rejoicing'

jt wrote:
- quote -

Since I would be deemed to have a conflict of interest on this one I
won't comment in detail except to say it is highly unlikely that Intuit
is going to cover this one in the Oregon help files--and certainly won't
defend any position you might derive for any statement they do make in
their tax software.

Tax software publishers generally spend far less time and effort on
state tax software than the federal, simply because less of the funds
can be recouped. And, as well, in most cases what the tax software does
is simply repeat IRS or state revenue department publications and form
instructions.

One hint for the poster, though--go to Google and enter

"oregon department revenue stock options"

The first hit is a 1998 court case. Since I'm not being paid for this
response I'll only warn that you need to determine if this case is still
good law--but it does suggest an answer that may very well still be the
case.

--
Ed Zollars, CPA
Phoenix, Arizona

- quote -

Hopefully Texas doesn't tax any such thing (they compensate
with fierce property taxes). As for Oregon, just maybe you
will find documentation conflicting/vague/amateurish like I
did for my state (altho I find federal documents readable).

One alternative to possibly high priced pro advice is to use
software like turbotax for state taxes. There are discounts
for using the internet version, and it cuts thru the legalese
with fairly understandable dialogs. Hope it is correct,
since it can give more favorable "rulings" than I would make.
Maybe someone else has opinions of good or bad state software...

Larry Louks wrote:

- quote -

I don't know about Oregon specifically, but some states do take
the position that income realized upon the EXERCISE of an option
is "sourced" to the state where the work that earned the option
was performed, regardless of where you are at the time the option
is exercised. I would suggest that you contact a competent tax
pro in Oregon.

MTW

Larry Louks wrote:
- quote -

This is the kind of thing where you have to research and understand the
particular rules of both states in order to find the answer to your
question. If I was you I would go to the Dept. of Revenue websites for
Oregon and Texas and just start researching.

Andy

Perhaps there are those here who can offer me a bit of help. Thanks in
advance!

After living in Oregon for several years, I was laid off last July. At that
point we decided that it was time to move back to Texas, where most of our
family members are located. This was a good move for us, as it is great to
be able to see them all with some measure of frequency.

After we moved back to Texas, I did a same-day sale on some stock options
that I still had from my former employer. My question is this -- will I have
to pay Oregon state income tax on that money? My initial thought is that I
would not, since I "made that money" while living in Texas. But out of
ignorance of such tax matters, I thought it wise to begin looking into this
before I get my taxes done. Again, I appreciate any help that you may be
able to convey to me.

Larry
'vigilance and diligence are never out of style'