Can I take a capital loss for underwater stock options?
September 26, 2011
Date: Tue, 23 Mar 2010
I retired last year and my NQSO had an expiration date of January 31, 2009. I tried to exercise them, but they were “underwater.”
Can I take a capital loss on Schedule D for the excess of the grant price over the fair market value at expiration?
Date: 7 Apr 2010
No. You had no tax basis or cost for the options because you didn’t have taxable income when your received them.