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Date:   Wed, 12 Apr 2006
From:   Pat

My husband has Delta Air Lines employee stock options which were given to him as an employee. The company is now bankrupt. Can we claim a deductible loss for these options on our income tax returns?

Answer

Date:   01 May 2006

Hello Pat,

No. Since there is no taxable income when the options are granted, you have no tax basis (investment) in the options to deduct.

Good luck!

Mike Gray

For more information about non-qualified stock options, request our free report, Non-Qualified Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.