I'm modelling some scenarios exercising and selling ISO stock options including "same day sell" and "hold for a year and a day", the latter one trying to take advantage of the long term capital gains tax treatment of ISO options.

Unfortunately, that all gets horribly complicated through AMT. In some scenario you end up with some amount of net cash and some amount of AMT Credit. For example scenario A) may net $100k in cash and $0 in AMT Credit and scenario B) may net $85k of cash and $40k of AMT Credit.

What's a good method to decide which of these outcomes is "better" or preferable? I would assume that AMT Credit is less valuable then cash but also not worthless either.

Is there are reasonable method to assess the cash value of AMT Credit?

  • Are you likely to be paying the AMT? – Joe Feb 11 '19 at 22:29
  • @Joe: yes. This is not just an academic exercise. Some realistic scenarios end up with a non-trivial amount of AMT credit and I don't know how to compare AMT credit to cash $$$ – Hilmar Feb 13 '19 at 6:11

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