Should I exercise non-qualified options to take a tax loss?

September 19, 2011

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?



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

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