Alternative Minimum Tax
What AMT is, how ISO exercises trigger it, how the AMT credit works, and how to exercise without crossing the line.
- What is AMT on ISO exercise?In depth
Exercising incentive stock options can trigger the Alternative Minimum Tax even without a sale. Here's why, with a full worked example.
- What is the AMT credit, and how do you get it back?In depth
Overpaid AMT from an ISO exercise isn't lost. Learn how the AMT credit is generated, recovered via Form 8801, and carried forward.
- How to avoid AMT when exercising ISOs
You can usually exercise a meaningful number of ISOs each year with zero AMT. The trick is sizing the exercise.
- The AMT crossover point: exercising ISOs tax-free
The crossover is the exact exercise size where AMT starts to bite. Below it, your ISO exercise costs nothing in tax.
- Form 6251 and Form 8801 explained
Form 6251 calculates AMT. Form 8801 recovers the credit. Both show up on returns with ISO activity.