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I am leaving my current job and joining another company. So

I am planning to buy...
I am leaving my current job and joining another company. So I am planning to buy 100000 stocks that I was granted and vested. The exercise price of which is $0.14 and the fair market value of the stock is $0.147. How much is my AMT going to be? I am trying to decide whether to buy my stocks or not and the tax implications. My yearly salary is 150k and I have no other income.
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Answered in 44 minutes by:
12/14/2012
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
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Are the stock options statutory (ISOs) or nonstatutory? Is the stock publicly traded? To confirm, if you exercise the options then the difference on the transaction would be $700 (14,700 - 14,000)?
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Customer reply replied 4 years ago

The stock options are ISO. It is still a private company. So is the taxable amount only $700 ? Is there anything else that I should worry about ?

Since they are ISOs, only $700 would be considered an adjustment for determining whether any AMT would be due. This amount plus any other AMT adjustments would be added together to determine if you would have to actually pay any AMT. Other adjustments would be items such as any state and local taxes claimed on Schedule A, certain miscellaneous itemized deductions claimed, and personal exemptions. So if the other adjustments are not significant, AMT will probably not apply. The links below provide more specific details.

http://www.fairmark.com/execcomp/isoexer.htm

http://www.fairmark.com/amt/topten.htm

http://www.irs.ustreas.gov/pub/irs-pdf/f6251.pdf

Bill
Bill, Enrolled Agent
Category: Tax
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