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Level 1
posted Oct 11, 2020 2:54:16 PM

Do I get a tax benefit for stock options I hold for a former employer company which is in liquidation?

Unfortunately my former employer company suffered too long under the conditions of the impacts of COVID-19 so is now in liquidation in 2020.  I had several years of incentive stock options (ISO's) as well as some option shares I purchased upon exit from the company in 2014.
Can I record those shares as a loss in the 2020 tax year?  The shares were not exercised.  And if so, how do I calculate the amount for what is now a $0 valuation?

0 2 751
2 Replies
Level 15
Oct 11, 2020 3:22:18 PM

The unexercised options have no value  ... you have no loss on these.   Once the liquidation is done and you know what you got out of it, if anything, then you can write off the loss of those stocks you actually owned. 

Level 1
Oct 11, 2020 3:29:16 PM

Thanks for your reply, Critter-3.  That makes sense, as the options were only options to buy.  
But what about the additional options I purchased?  Is the amount I paid for these deductible as a total loss?