Hi George, your response is very helpful as I also have a similar situation. However, my case is more complicated.
The former employer (a private Inc. company) repurchased unvested ISO and NSO shares at the exercise price ($4/share) at the time of service termination, and the repurchase was made WITHIN ONE YEAR of the exercise of ISO and NSO shares.
For the ISO portion of the repurchase, the cost basis ($4/share) and proceeds for ISOs ($4/share) are the same, i.e., 0 gain from the repurchase. As it's repurchased within 1 year of early exercise, will the short sale affect the tax benefits of ISOs and lead to tax return amendment for the year of exercise?
For the NSO portion of the repurchase, I lost money as the proceeds ($4/share) was lower than the cost basis (FMV price, $9/share).
Do you think it's OK to just claim the loss from the NSO portion of the repurchase as a capital loss?
