Most tax deductions are based on your cost (basis)whatever it may be. If you issue stock your basis is zero (It did not cost you anything) therefore no cost basis to deduct. You are correct. They could be working on the collateralization you suggested as we speak, we don't know. It would probably have to get the IRS's blessing given the amount involved, and that will take time. The banks will need assurance that the IRS will actually fork over the refund. My experience has been that the IRS doesn't do anything fast. I'm sure it will be at or near the March deadline before we know.