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Subject:   iso's, amt, and moving states
Date:   Mon, 28 Mar 2005
From:   Matthew

Hi Michael,

I exercised and held some ISOs in 2002 and paid Federal and California AMT. In 2003, I moved from California to Colorado. I sold the shares I purchased using the ISOS in 2004.

I am wondering if and how I can claim credit towards my Colorado state taxes for my California AMT paid on the exercise of the ISOs. Am I out of luck on this? Has there been any clarification on this since you wrote about the problem in 2001?

Thanks.
Matt

Answer

Date:   Fri, 08 Apr 2005

Hello Matthew,

I haven't seen anything to give you any comfort. To my knowledge, Colorado won't allow a state tax credit for an AMT paid in an earlier year for the exercise of an ISO when the stock is sold for a capital gain in a later year. I'm not an expert on Colorado taxes, so consider consulting with a local CPA.

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.