Stock options converted to RSUs

[GoCanucks]

Hi Nelson and all,

I moved from Canada to U.S. on 1/1/2012 to work for the same employer but in the headquarter office. I had a number of underwater U.S. stock options granted in 2009 when I was working for the same company in its Canada branch. In the mid of 2012, my employer (in U.S.) offered to exchange these underwater stock options for a reduced number of RSUs (not vested yet). I accepted the offer, and consequently I received T4-2012 that has an income resulting from this exchange. I will declare this income to CRA when filing my 2012 tax return. The question (Q#1) is how I should handle this income when my U.S. tax. My understanding is that I do not need to declare it to IRS as a U.S. income because these RSUs were not vested in 2012. But am I required to declare it as world income because of the Canada T4? If so, where should I put this information?

Also two more other questions:
Q#2 - My wife moved to U.S. to join me in May 2012. As I understand she can elect to file full year U.S. return instead of dual status. Can we do married filing jointly? I think we can but I am not 100% sure. Also, according to Pub 519, my wife needs to attach a statement for her full-year U.S. filing election. But the TurboTax software does not seem to have this option. Do I have to do this manually and do paper filing for this first year?

Q#3 - My wife and I both had a TFSA, both closed in 2012 before her moving. I just realized we need to report them in 3520-A but the deadline seemed to be 3/15/2013. Will we receive penalties from IRS for filing 3520A late?

Many thanks!! I know the 4/15 deadline is in a few days ...

[nelsona]

Q2: you can always fileea 1040, as a CDn. Doesn't matter where your wife is or even if you are married. And don't worrry about 4/15, as long as you don't owe, you can file whenever you want, before October 15

You shouldn't e-file because of the statement. You will have to mail-in your return witha written statement.

Q3: just file it.