Can we deduct our loss on options in a bankrupt company?

September 18, 2006

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?


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, “Executive Tax and Financial Planning For Non-Qualified Stock Options”.

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