Skip to main content
6 votes
Accepted

Dividing capital gains over 2 calendar years

Yes. that's exactly what the article implies. I'd highly suggest that someone in such a situation get a copy of tax software as soon as it comes out, usually near Black Friday (the day after ...
JTP - Apologise to Monica's user avatar
6 votes

What is the total underpayment penalty for not paying AMT immediately?

I think you might be overthinking this. In general, the alternative minimum tax (AMT) due (if any) is not due as of the date(s) when the events that triggered the AMT occurred and there is no need to ...
Dilip Sarwate's user avatar
5 votes
Accepted

Why does the credit for prior year AMT exist?

The 10-year revenue impact needs to be estimated for tax legislation, and AMT (Alternative Minimum Tax) on ISOs (Incentive Stock Options) addresses this by reducing the 10-year revenue loss by ...
Stan H's user avatar
  • 7,551
5 votes

Does AMT affect cost basis of future capital gains?

You don't pay taxes on the discount ($1->$2) twice. You actually have a separate cost basis for your shares in the normal tax system versus AMT. Google 'AMT cost basis' and you'll see examples like ...
Craig W's user avatar
  • 15.9k
5 votes
Accepted

Will I lose the AMT tax I paid if my startup fails?

This is a tax, not a deposit. So no, you will not get it back. You will be able to use your AMT credit, under certain conditions, see the instructions to form 8801. Obviously, the actual value of the ...
littleadv's user avatar
  • 177k
5 votes
Accepted

Do I need to calculate Alternative minimum tax?

The Alternative Minimum Tax is called "minimum" for a reason. It only affects you if it ends up being more than your tax burden without it. If, as you say in the comments, your Alternative ...
Ben Miller's user avatar
  • 116k
4 votes
Accepted

ISO exercise limit before triggering AMT

Around $32,600 of discount/spread in exercised ISOs would give you a roughly equivalent total tax between the regular and AMT systems. With these numbers, under the regular tax system you'd pay $22,...
Craig W's user avatar
  • 15.9k
4 votes
Accepted

Is there anything to do immediately after exercising stock options?

Much like if you had a large capital gain with no withholding, you should determine if you'll be at risk of an underpayment. Generally this means you end up owing more than $1000 at tax filing time, ...
Craig W's user avatar
  • 15.9k
4 votes

Recouping AMT paid from exercising ISO Stock Options when sold

Your stock has a $50 cost basis in the regular tax system and a $100 basis in the AMT system. With the $75 proceeds, this means you have a capital gain in the regular tax system and a capital loss in ...
Craig W's user avatar
  • 15.9k
4 votes

Refiguring for AMT, detailed instructions

The instructions are actually pretty detailed. Every year you must track your taxes based on the "regular" calculation and the "AMT" calculation. For vast majority of the US ...
littleadv's user avatar
  • 177k
4 votes

Refiguring for AMT, detailed instructions

AMT is certainly one of the more challenging parts of the US tax code (which isn't easy to start with). The problem with AMT is that it can generate horribly entangled multi-year dependencies and in ...
Hilmar's user avatar
  • 7,915
3 votes

Do I need to calculate Alternative minimum tax?

AMT was invented to target people that have high special deductions or other extreme cases, and would be able to avoid normal taxes with that. Very rarely will you have to pay AMT if you are an ...
Aganju's user avatar
  • 37.7k
3 votes
Accepted

With zero earnings aside from long term capital gains, when would AMT and/or NIIT kick in?

Generally that means the capitial gains are taxed at 0%. No, capital gains are taxed at different rates depending on your total taxable income. See the IRS Topic 409: A capital gains rate of 0% ...
littleadv's user avatar
  • 177k
2 votes

Do people who have no income (living off savings) pay AMT?

The money they retrieve from their savings account is not taxed. However, the interest that they earn on those accounts are taxed. When you put money into your savings account from a pay check, it ...
Michael's user avatar
  • 10.2k
2 votes

How to know FMV of ISOs?

Read the "Stock Plan" or "Stock Option Agreement" or whatever paperwork you had to sign and agree to when you received the options. They typically spells out how this works. It's not fun reading, but ...
Hilmar's user avatar
  • 7,915
2 votes

Purchase Stock but cannot pay AMT

To repeat a standard disclaimer but this is something you should approach a tax consultant with. You already seem to have an estimate of $1.2M (which I'm not sure how you have). The best reference ...
perennial_noob's user avatar
2 votes

Why does the credit for prior year AMT exist?

But, why collect a tax one year only to hand it back (minus inflation) in future years? Applying logic and rational thinking to the tax code is often a futile exercise. Much of it is unfair and doesn'...
Hilmar's user avatar
  • 7,915
2 votes

Would allowing my company to pay me less in order to donate that money to charity lead to net increase in charitable donations?

You mentioned a bunch of potential downsides to this arrangement but I'm not really seeing much benefit. If your company makes the donation for you, they'll save 1.45% on Medicare tax and you'll save ...
TTT's user avatar
  • 47.2k
2 votes
Accepted

Would allowing my company to pay me less in order to donate that money to charity lead to net increase in charitable donations?

The first thing that jumps out to me is payroll taxes. When the company pays you and you donate the money, the tax deduction for the donation offsets the income tax owed for that money; however, you'...
Daniel's user avatar
  • 5,330
2 votes

With zero earnings aside from long term capital gains, when would AMT and/or NIIT kick in?

As the other answer mentions, the 0% long-term capital gains bracket is not unlimited. If long-term capital gains are your only income, you will never owe any AMT. The more favorable long-term capital ...
Craig W's user avatar
  • 15.9k
1 vote

Would allowing my company to pay me less in order to donate that money to charity lead to net increase in charitable donations?

You would have to talk to a professional about this: this is dangerously close to an illegal tax evasion scheme. This probably depends a lot on how exactly you structure this. You can do it "...
Hilmar's user avatar
  • 7,915
1 vote

Are nonresident aliens filing the 1040-NR eligible for the $72,900 AMT exemption?

See the instructions for Form 6251 (Alternative Minimum Tax—Individuals), line 5: Form 1040-NR. If you are filing Form 1040-NR, use the following chart to figure the amount to enter on line 5. ...
Craig W's user avatar
  • 15.9k
1 vote

Are nonresident aliens filing the 1040-NR eligible for the $72,900 AMT exemption?

That article talks about real estate, not stocks. In Form 6251 instructions, there is a section called Nonresident Aliens regarding disposition of US real property. I don't think it would apply to ...
user102008's user avatar
  • 17.3k
1 vote

When paying AMT, might it make sense to take standard deduction even if it's more expensive?

Yes, I think it could make sense in some scenarios. First let me recapitulate the situation you laid out. Let's say you are single and have a salary of $100,000 in 2021. You also realize AMT income of ...
Craig W's user avatar
  • 15.9k
1 vote

US Tax implications? Bought stock options, paid AMT, company acquired at a loss, options worthless

All common stock shareholders got zero. I assume you mean the stock was cancelled (by the company), so you didn't receive any payment and cannot receive any in the future. If you still have any ...
dave_thompson_085's user avatar
1 vote
Accepted

What is earned income from the 2016 Exemptions Worksheet

First you compute your exemption amount using the regular rule, using your AMTI. Then, if you qualify as one of “certain children under age 24”, then you compute the minimum exemption as earned income ...
prl's user avatar
  • 2,817
1 vote
Accepted

AMT credit against regular tax

Most of the time, AMT does not generate a credit to be carried forward. It does in cases where the AMT was triggered by deferred taxes, such as the special treatment of ISOs (incentive stock options). ...
prl's user avatar
  • 2,817
1 vote

Do I need to calculate Alternative minimum tax?

The AMT exemption rose from $54,300 in 2017, to $70,300 in 2018. As long as your income didn’t rise dramatically, nor did your itemized deductions, I’d think it’s safe to say that you would not be ...
JTP - Apologise to Monica's user avatar
1 vote

How to know FMV of ISOs?

I think you may find that this is neither as simple, nor as wise, as you may think. ISOs, or Incentive Stock Options, are granted to employees to convince them to work harder, longer, for a lower ...
Istanari's user avatar
  • 2,131
1 vote

AMT Tax on Company Stock Options

CAVEAT: I'm not a tax professional or pretend to be one. AMT is really complicated and you may be best of working with a professional If the stock is tradable, it's probably your best bet to sell it ...
Hilmar's user avatar
  • 7,915

Only top scored, non community-wiki answers of a minimum length are eligible