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I think I already know the answer, but here it goes. I cashed out ISO's and sold on the same day as the exercise of the options (SDS). The gain is shown on my W2 as ordinary income. I sold other stock during the year for a capital loss. I'd like to deduct the capital loss (say $10,000) from the Gain in Ordinary Income (say $60,000) as already included within my W2. Is there any way to do this?

As you suspected, no. Sorry, but I don't know the answer to your other question, but I believe there are minimum holding periods for gains from ISO's to be treated as other than wages, and I don't think 2 days does it.

Phil Marti
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