Two years ago I wrote a check to IRS for AMT because I exercised my incentive stock options when I left a startup. AMT was due for that tax year, because the private company's fair market stock price exceeds substantially compared to the exercise price. AMT was based on the supposed profit (Number of shares * (fair market price - exercise price).
For the next two tax returns I am now carrying substantial amount of 'prior year' AMT tax credit. It is reducing slowly but it is now about 90% of what I paid two years ago.
Today I am free to sell the shares at even higher price. The question I have is since I paid AMT based on the company valuation two years ago, am I allowed now to use the price based on two years ago (instead of my exercise price) to calculate capital gain. If I use original exercise price, I would end up paying tax twice for a good portion of the capital gain [number of shares X (two years ago price - exercise)]. Otherwise, how would I get back the so-called substantial amount of 'prior year AMT tax credit/carryforward'
What I notice is AMT tax credit is lowered when I exercise ISO grants (at a new company). Because the new company valuation is not as high, the new ISO profits does not compare to prior company. If I never work for another company with ISO again, is it the case that I would never get back all my AMT tax credit?
If this requires a face to face session with an expert, I would like some suggestions on 1) where to find such an expert 2) what type of qualification I should look for? Do I need a lawyer? A CPA specializing in this area? I live in Queens, NYC.
