Do I need to pay AMT?

February 14, 2000

Subject:   Question
Date:   Wed, 12 Jan 2000
From:   Dan

Incentive Stock option plan.

I want to know if I will be subject to the AMT?

I am leaving a company that has yet to go public. The company contracts an individual to set the exercise price for any newly issued options every six months. I had read that the AMT only applies if the company has gone public and the stock can be readily transferred. Can you help?


Date:   19 Jan 2000

Hello Dan,

The AMT applies when ISOs are exercised, even when the company hasn’t gone public.

The company should provide you with the fair market value on the date of exercise.

See your employee benefits department.

Good luck!
Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options – Executive Tax and Financial Planning Strategies.

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