Non-public stock reverse split and accountant for taxes?

[SavingWithBabies]

So one of the startups I worked for was hot hot hot. Until they hit a brick wall in terms of revenue growth due to relying a 3rd party advertising platform. The 3rd party rate limited ads that went to that startup's domain (no matter if it was the startup buying retargeting ads or the sellers on the startup's platform buying the ads). There was a lot of disappointment all around. When you see a chart going extreme up and to the left, it's pretty amazing to watch. Then you see $1M revenue (not profit) days and it's amazing... Then, well, things just flattened out. Still a great business but rate limited and the venture capitalists could no longer expect outlandish returns on their investment.

So, long story short, they ended up doing a "down round" and as they were no longer the poster boys of Silicon Valley, they had to or chose to do a reverse split of say 15:1 on the common stock.

The year I left that startup things were still looking fairly good and I exercised the options to buy the stock. I paid something like ~ $3k USD for the stock and then it pushed me into AMT for taxes as it was not an early exercise of the options so I had to pay taxes on the delta of the option price to the current valuation at the time of exercising the options. So overall, a bit of a painful experience but first startup and such is life.

Should most tax accountants be familiar with this or is this a special case kind of thing (I'm no longer in the San Francisco Bay Area but now in Michigan)? What I want to know is if I can write any of this off? If I take the standard deduction, is it not going to make a difference? I'm going to keep digging and see if I can answer this question but that is the kind of thing I'd be asking them (or you if you happen to know ).

[IlliniDave]

Just a guess, but I suspect until you sell and realize a loss you probably can't write anything off. A good tax accountant should know the answer though, or how to get it. Trick would be finding a good one.

[SavingWithBabies]

@IlliniDave That thought came to me after I posted -- that seems logical as it is unrealized. I can't actually sell it as they aren't public. Well, I might be able to but I think I signed a contract not to and at this point I think I'd rather just ride it out. It'll be interesting if the company is in limbo long term. I'll start asking around about tax accountants .