Let's say I currently have the right to exercise some employee stock options (ISO) at a certain strike price. I have add these options for more than a year.
I read that the AMT tax applies on the difference between the value of the stock at the moment at which I bought it and the value of the stock at exercise. I assume the later is derived from the 409a valuation.
Here are the 3 questions I have:
1. Is the AMT tax based on the last 409a valuation at the time of exercise?
2. My company is growing fast and its fair market value should be growing just as fast. Does it make sense for me to exercise my options sooner in order to pay lower AMT taxes. If I wait, a new 409a valuation could be issued and I would have to pay more taxes. I realize that if I decide to sell those options after an IPO or after the company is acquired, I will have to pay long-term capital gain taxes on these but I would be able to pay the taxes from the gains as opposed to now.
3. When it's time to file my taxes, will have to ask my company about its fair market value to calculate my AMT? Does my company need to file a 409a regularly that I would use to calculate the AMT?