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Level 1

Forfeit of 16k in incentive stock options

Hi,

I was awarded 16k in ISOs.  I was not able to exercise them until after a certain number of years of employment.  However, I was laid off and I was told I lost them.  Can the loss be written off in some way?

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Level 5

Forfeit of 16k in incentive stock options

What happens if an employee who makes an election leaves his job before the stock substantially vests? In that case, the employee forfeits his stock and is allowed a limited loss deduction. The amount of the deduction on forfeiture is limited to the amount paid for the stock, less the amount realized on the forfeiture (if any). Reg. §1.83-2(a). Notably, though, no deduction is allowed for the amount the employee previously included in income by making the 83(b) election.

 

ISO forfeit