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Originally Posted by Lubicon
Maybe a long shot here but a question regarding capital gains on employee stock options.
I have (had) a small amount of options at work. When I exercised them I opted for immediately selling and taking the money rather than actual stock. So of course there is withholding tax, which is fine. Fly in the ointment is when I first started we did not have that option, you had to physically take ownership of the stock. And we did not have an automated system so it was all done manually with stick certificates sent to you and everything. Due to a glitch when I exercised those and the time delay to get tit sorted out the market price had dropped below the strike price and kept on dropping. As a result I was way underwater on these when I actually sold them.
so questions are:
1. can I claim a capital loss on those shares? It's a significant amount
2. are the withholding taxes considered capital gains and can I claim that back against the capital loss from quetion 1 (if applicable).
Is that considered capital gains tax?
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There are a lot of different ways that can go, it really depends on the specifics of the issuance.
I'd speak to whomever your accounting professional is, otherwise you can PM me and I can have a look at it.
Just based on the information provided (Huge Disclaimer here) you could potentially claim Capital losses if your physically held shares were sold below what you paid for them and 'No' withholding taxes would not typically be applicable against Capital losses or gains. These two things rarely interact unless circumstances are different.
Huge grain of salt here. Because a few things seem unusual.