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Date:   Mon, 22 Mar 2010
From:   Michelle

Hi Michael,

I exercised and held ISOs last year and the tax preference for the excess of the fair market value of the stock over the option price was about $30,0000. From what I understand, since the preference is under the AMT exemption of $45,000 for a single tax filer, then I won't have an AMT. Is that right?

Also, I thought some of the information for the exercise should be reported on my W-2. Is that right?

Thank you for your time.

Sincerely, Michelle

Answer

Date:   7 Apr 2010

Hello Michelle,

No, I'm afraid you are mistaken on both counts.

Your additional AMT income is added to your regular income on Form 6251. I suggest that you get a copy of the form and instructions at www.irs.gov.

The information isn't reported on Form W-2, but your employer is supposed to provide you with a statement of information for you to report on your income tax return.

Good luck!

Mike Gray

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IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.