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Get your taxes done using TurboTax
Publication 525, page 12 the AMT paragraph states that if the stocks acquired under ISO is not transferable (can not be sold) then there is no adjustment needed on line 2i. I exercised the option and acquired the stock and got form 3291without any tax withholding. Also Investopedia states, "However, the adjustment is required only if your rights in the stock are transferable and not subject to a substantial risk of forfeiture in the year the ISO is exercised. And the fair market value of the stock for purposes of the adjustment is determined without regard to any lapse restriction when rights in the stock first become transferable or when the rights are no longer subject to a substantial risk of forfeitur." My company is a small start up. It has not IPOed yet and I can not sell 180 days after it goes public. It is not like Microsoft that it's stock can readily give the market value. Do I have to do AMT and pay $20,000 tax when I can not do anything with that stock for many years from now? the company may even go bankrupt. Thank you.