Can I recover taxes I paid on employer stock in a prior year?
October 10, 2011
Date: 9 Apr 2008
From: Tony
My employer split into 2 divisions at which time my options were also split. One division was sold and my options were converted to shares on which I paid taxes. I sold those shares last year at a loss. I understand my (capital) loss is limited to $3,000 per year and can be carried over.
Can I recover the taxes I paid in that prior year since the stock’s value when sold was lower?
Answer
Date: 6 May 2008
Hello Tony,
No.
The only way I can think of that you could is if capital loss carrybacks were allowed for individuals, and they aren’t.
An idea is to establish that the value on the date that you converted the shares (exercised the option) was wrong. That would be very expensive and difficult to prove in light of the division sale.
You only have to look at listed values of shares on the stock market to know that values change all of the time. Tax results depend on values on transaction dates, not later events.
Good luck!
Mike Gray