>No. The tax event is on the grant, not capital gain (therefore capital loss does not cancel). Furthermore, if I fall under AMT (very likely), I can't deduct anything.

Ooph . . . sorry. However, just so I understand, if your shares were to rise above the transaction price, would you not be subject to capital gains tax on the gain? It would seem a bit misaligned if you could be taxed on gains but not benefit from losses (however, I wouldn't put that past the codes and that still wouldn't account for AMT issues).

Good luck with it!