Since you confirmed that you have an ISO, you will have a different basis for regular tax and AMT.
For AMT, you add the bargain element of your exercised ISO to your alternative minimum taxable income in the year of exercise. As a result, your AMT stock basis becomes the FMV of the stock as of the exercise date.
So now when the ISO stock is sold, you will generally have a negative AMT adjustment equal to the excess of the AMT stock basis over the regular tax basis in the year of sale.
It is this adjustment that avoids the potential double tax that you are referring to. However, while employees may have an AMT adjustment, that does not mean that they will always be subject to AMT tax. But the above will neutralize any impact of picking up the AMT component in the year of exercise.
TT should handle this, however, you need to remember that when the question comes up on basis, you will need to input the correct AMT basis in order for TT to make this adjustment.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
