ISO

[gk]

Hi,

One of my client  was awarded ISOs  in 2017. He exercised part of these in 2021 (when the fair market value was much higher), but did not sell. In my opinion, he owes AMT tax to the IRS. How can I confirm this? If yes how do i calculate the AMT tax in proseries?

GK

[rbynaker]

Form 6251 box 2i and related instructions.

[gk]

Thank u. So when he sells the ISO he has to pay the tax on capital gain again right? How does that work.? Please advise

[rbynaker · Accepted solution]

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@gk wrote:

Thank u. So when he sells the ISO he has to pay the tax on capital gain again right? How does that work.? Please advise

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Quite poorly IMO.  You'll be carrying an AMT credit forward via Form 8801:

https://www.irs.gov/pub/irs-pdf/f8801.pdf

It may or may not help.  In the year of sale you'll have an AMT adjustment in the opposite direction (because your AMT basis is higher than your regular tax basis).