Stock Options Exercised But Not Sold That Subsequently Lost 50% Of Value In Same Year

[Alan Ru]

I lost my job in 2025, but owe about $10K on 2024 taxes.  Is there a way I can adjust my basis on those stock options (to lower my 2024 taxes), even if it means I have to adjust it again in a later year?

[JCampbellEA]

Unfortunately, you can't adjust the basis of stock options just because their value has decreased. The basis of stock options is generally determined by the price you paid for them, and it doesn't change based on market fluctuations. You can only realize a gain or loss for tax purposes when you actually sell the stock options or exercise them and then sell the underlying stock. Until then, the loss in value is not recognized for tax purposes, so it won't help reduce your 2024 tax liability.