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> Provided you don't hit AMT I think people downplay how easy it is to hit AMT. A single, no dependents, standard deduction filer making $120k will hit AMT aft
by phamilton 11y ago
> Provided you don't hit AMT
I think people downplay how easy it is to hit AMT. A single, no dependents, standard deduction filer making $120k will hit AMT after $26k of on paper gain for ISO exercise. Everything after that will be taxable. Filing jointly, 2 people who each earn $120k can absorb $18k in on paper gains from exercising ISOs. Add in a kid and it drops to $15k.
That's a paltry sum, basically breaking any advantage ISOs provide.
- limeyx 11y agoYes but I believe you can (eventually) get the AMT difference back in offsets assuming there are later years when you are below the AMT limit. Fiendishly complicated and increasingly dumb though ...
- phamilton 11y agoThat's assuming you can come up with the cash in a timely manner to pay the tax bill and your illiquid asset holds its value. It's a rough situation and something needs to change.