Stock Options & Wash Sales

I exercised non-qualified stock options during 2001 and sold the stock on the same day I exercised.

The company determined the fair market value for compensation purposes as the average of the high and low stock price on the date I exercised. If I sold the stock on the day I exercised, and the price that I sold was lower than the price used to determine compensation, is it a "Wash Sale" where I cannot deduct the capital loss?

For example. I had 100 options with an exercise price of $25. When I exercised, the fair market value was $40. For compensation purposes, my income was $1500 and my basis in the stock was $4000. If I sold the stock for $38 ($3800), I would normally experience a capital loss of $200. However, if I sold the stock within 30 days of exercising the option, is this a wash sale and the capital loss is not allowed?

Thanks

If I understand your transaction correctly, it is not a wash sale. It would have been a wash sale if you exercised the option, then sold the stock and purchased the substantially identical stock within 30 days, or if you purchased substantially identical stock and within 30 days of that exercised the option and sold the shares represented by the option.