wrote:

- quote -

Yes, the 1/17 expiration date is a clue that these are
listed options.

For what it's worth, by having a loss occur in the first
three months of 2007, it will reduce the total amount of
witholding and/or estimated tax payments you're required to
make by April 15, 2007. So the benefit of the tax loss is
probably only delayed by one quarter, not an entire year.

Steve

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Seth Breidbart wrote:

- quote -

Ordinarily, the options (which I purchased on the options
exchange for $X a couple of years ago) would expire in 2007
at which time the broker would send me a trade slip showing
they expired worthless.

In further discussions with the broker, they stated they
will leave the "cabinet" order in affect until Dec. 28. If
it doesn't execute by the end of the day on the 28th, they
will execute what they call a "courtesy buy" on the 29th.
This will provide me with a trade slip showing the sale in
2006 which is all I need to take the deduction in 2006.

Thanks to others who offered to buy for a .01, but it looks
like I'm in good shape now.

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Ernie Klein wrote:
- quote -

=== snipped===
- quote -

These are not options that I "earned" from employment but
rather options I purchased on the options exchange for $X.
So my loss is $X and it can be deducted from income tax, if
I can "sell to close" in 2006. Otherwise, I take the loss in
2007 when they normally expire.

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Ernie Klein <ecklein[at]pacbell.net> wrote:

- quote -

He had the money he paid for the options. Then he paid it
for the options; at their expiration date (unexercised),
they disappear, which is considered a sale for $0.

- quote -

Sure: He pays $100 for an option. The stock goes up, the
option goes to $200. Then the stock goes down, and the
option expires worthless. He gets a deduction for $100, the
$200 is only the value used for kicking himself.

- quote -

If you didn't pay tax on the value of the options, your cost
was $0, so that's your deduction.

Seth

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Stuart A. Bronstein wrote:
- quote -

They use to do it that way. But now they issue something
called a "Cabinet" order so it can actually be processed on
an exchange. A discussion of "Cabinet" orders appears at
http://www.sec.gov/rules/sro/cboe/2006/34-53808.pdf

I suppose they feel they have to follow the SEC rules on
this process. Perhaps on the last day of the year they will
buy them back if all else fails, or not.

Moderator:
I will buy them from you for a penny and you pay all
costs. But, check to make sure you will have an actual
out-of-pocket loss to write-off. If you did not pay for
the options or pay taxes on them when you received them,
you will have no loss to write off.

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

There is an options market. One can buy and sell
unexercised options prior to the expire date. However, it
the underlying stock price drops way below the exercise
price (or itself becomes worthless), then the value of the
options can drop to zero because no body wants an option to
buy stock at a higher price that is is sell for on the
market.

I think this is what the OP was talking about.

If one holds options that have not been exercised and the
options themselves become worthless (or next to worthless) I
don't think there is any tax "write-off" (read deduction),
because the options only had a paper value at one time, but
the OP has lost nothing because he had never had anything
except a piece of paper -- in other words he isn't out any
money at all.

One cannot deduct "what might have been" if the options had
been sold when they _did_ have worth.

I had the same problem myself a few years ago. The company
I worked for gave me some options to buy the Company stock
at $35 when the stock was selling for $45. I could have
sold them (the options) 6 months later for about $5,000, but
I didn't -- hoping they would become worth more. Along came
the downturn of the market and the stock price fell to about
$25 and the value of the options to purchase stock at $35
became worthless. The stock never recovered it's price
before the options expired, so I received _nothing_, nor
could I take a loss on taxes because I never _received_ a
gain.

Am I wrong, or did everyone else that answered misread that
it is options and not stock that the OP was asking about?

--
-Ernie-

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- quote -

No, it seems more like he has options to buy a stock for
$50, and the stock is now trading for $3. (Wasn't there
someone here who offered to buy any stock holdings for $1?
Maybe he'll pay $.01 for options.)

Seth

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njoracle wrote:

- quote -

Your post is not entirely clear to me. However, assuming
you have excercised your options and the stock is now
basically worthless, one would think that your broker would
buy them from you for a penny.

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njoracle <njoracle[at]att.net> wrote:

- quote -

Lots of Good Brokers will buy the whole lot from you for a
penny or maybe a dollar, just to keep a good client. Push
harder.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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njoracle <njoracle[at]att.net> wrote:

- quote -

If there are no buyers at a penny, wouldn't that suffice to
declare the security worthless? Maybe you just need a
letter from your broker to that effect.

Seth

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njoracle wrote:

- quote -

I recall the 'worthless stock' question coming up before,
and the answer was that if there were no takers, that most
brokers would give you zero as a courtesy. Just to allow
you to take the loss. Otherwise as long as you are in
possession of a stock/option that still has an active ticker
(pun intended) you may not take the loss.

JOE

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njoracle <njoracle[at]att.net> wrote:

- quote -

Why doesn't your broker buy them?

Stu

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I have some worthless options (for most of 2006) that don't
expire until 1/17/2007. Broker is trying to sell them for a
penny but so far no takers. Is there any way that I can
write them off as a 2006 tax loss or will I have to until
2007?

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