Print This Page

Date:   Thu, 14 Oct 2010
From:   Kathy

Mr. Gray,

I have 2,000 shares of fully-vested NQSOs with a grant price of $33.05. The company’s stock is currently selling for $13.17.

I would like to exercise the options to take a tax loss, which would help with our tax liability next year. May we do this?

Kathy

Answer

Date:   15 Oct 2010

Hello Kathy,

Maybe, but it would be crazy. You shouldn’t intentionally enter a transaction for a tax loss.

Instead of buying the shares using your stock options for $33.05, you can simply buy the same shares on the stock market for $13.17.

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.