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>Can I avoid paying this "income" tax by taking a loss on another stock that I own?

It depends on what type of stock options they are. If they're non-qualified stock options, you shouldn't have anything to worry about, as the taxable income will be (cost of stock - vesting cost) * options sold, and in your case, I suspect the amount those options are worth is 0 or negative.

If they're qualified, I don't know, but I'd suspect the answer is yes, though there might be some AMT issues to worry about.
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