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Stock Options & Non-Related Capital Losses

Question: “I have taken advantage of Stock Options over the past several years. This year I expect to incur significant capital losses unrelated to my stock option plan. Can I carry these losses back 3 years (and forward indefinitely) and claim them against the stock options gains that have been included in my taxable income.”

The general rule related to capital loss carryovers is that capital losses realized in the current tax year must be applied first to capital gains realized in the current tax year.  Any net capital losses may then be either carried back and applied to capital gains in the prior three years or carried forward indefinitely.

There is no requirement that the properties be the same only that they be capital properties.  This if the exercise of the stock options would have been normally treated as a capital gain, then any capital losses on the same shares or other shares or other capital properties may be claimed against other capital gains.