surprised
I sincerely hope I am misunderstanding the AMT, but here's my question:
In 2006, I have a gain from the exercise of ISO options, and I did not sell the shares I acquired. I understand that the difference between the price I paid for the shares and their fair market value on the day of exercise is AMT income.
Now if I sell the shares later after holding them for year, and I'm computing my AMT income for the year in which they are sold, then my basis includes the tax I have already paid.
Here's where I'm not clear: If I end up not paying the AMT in the year I sell the shares, then what's my basis? From the reading the example for Form 6251, it sounds like my basis does not include the AMT adjustment. Can that be right? If I already paid the tax in 2006, it only seems fair that my basis should be as if I had paid market rate for the shares. Can anybody clarify this for me?
In 2006, I have a gain from the exercise of ISO options, and I did not sell the shares I acquired. I understand that the difference between the price I paid for the shares and their fair market value on the day of exercise is AMT income.
Now if I sell the shares later after holding them for year, and I'm computing my AMT income for the year in which they are sold, then my basis includes the tax I have already paid.
Here's where I'm not clear: If I end up not paying the AMT in the year I sell the shares, then what's my basis? From the reading the example for Form 6251, it sounds like my basis does not include the AMT adjustment. Can that be right? If I already paid the tax in 2006, it only seems fair that my basis should be as if I had paid market rate for the shares. Can anybody clarify this for me?