Exercising incentive stock options can quietly trigger the alternative minimum tax. Spreading the exercise across years in smaller batches can keep you under the AMT line.
See how it works through one simple example.
Exercising incentive stock options creates a paper gain that can trigger the alternative minimum tax.
Instead of exercising all at once, you exercise in smaller batches spread across several years.
Spreading it out keeps you under the AMT line each year and avoids a surprise bill.
Educational guidance, not tax advice. We confirm every figure and your eligibility before you act.
Connect your account and we confirm your eligibility and the exact numbers.
Free to check. Nothing happens until you say so.
The honest version.
The spread between the exercise price and value of incentive stock options counts for AMT.
Smaller annual exercises keep the AMT-triggering amount under the line each year.
You can, because the AMT looks at the gain at exercise, not at sale.
Connect an account or upload last year's return. No card to get your number.
Find my savings