Can I get a tax deduction for worthless stock options?
July 12, 2004
Subject: Stock Options w/ Bankrupt Company?
Date: Mon, 21 June 2004
A former employer gave me both incentive stock options and nonqualified stock options and then filed chapter 11. The company will probably soon file chapter 7. I didn’t exercise the options. Is there any way I can claim a tax deduction for the worthless stock options?
Date: Fri, 02 Jul 2004
No. Since you never reported any taxable income for receiving the options and made no cash investment in them, you have no tax basis or investment to deduct.