Investors & landlords

Hello

I read threads in TurboTax Community support where you explained and clarified ISO and AMT related issues.

I need your help regarding the 2019 sale of shares acquired by ISO years ago and related AMT adjustments for Federal (Form 6251) and California (Schedule P(540)) .

This is the adjustment for the "AMT vs Regular Tax" due to a Disposition of property like ISO share for which I reported and paid taxes differently between AMT and regular tax when I exercised the ISO in the past.

In 2019 I sold shares acquired in 2011from ISO. Using  2019 TurboTax Premier, I enter the sale Info selecting the special situation to enter the ISO info as part of the Interview  process.  

Specifically I select the following in reporting the sale:

• “Guide me step-by-step” then
• “I have sales from and Employee Stock Option Plan, including EESP, NQSO, ISO, RS and RSU” then
• “Incentive Stock Option Plan (ISO)” then
• “Sold Shares exercised in 2019 or prior year” then
• I enter the sale info

For the Federal  - 1040 Tax Return ALL WORKS OK.

The Excess of AMT Income over Regular Tax income is reported correctly on Form 6251 (Part 1, line k) as “Disposition of property (difference between AMT and regular tax gain or loss) “

After completing the Federal Tax Return I then focus on the State of California Tax Return

However I am having problems with the California State Tax Return. I need to have the same California AMT Adjustment but I am NOT able to see it or enter it.  

The State of California Tax Return should have a Schedule P generated where the AMT Adjustment is reported in line 9 “Adjusted gain or loss. See instructions . . . “.

But in my California Tax Return I DO NOT have any Schedule P generated by TurboTax based on the Federal Tax information (Form 6251 Part 1 line k). I was expecting TurboTax to automatically carry over this Federal AMT adjustment amounts to the State of California AMT Adjustments.

Given that the AMT Adjustment was NOT automatically generated for the State of California, I then run the State of California Tax Interview to make adjustments manually and this is my experience so far.

In 2019 TurboTax I follow these steps for the State  of California:

1) I selected "STATE TAXES" then "California" then "Credit and Taxes" and finally under the "Taxes" group I selected "Alternative Minimum Tax"

2) Once there on the "About California's Alternative Minimum Tax (AMT)" the page it clearly states:

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AMT ensures that everyone pays a minimum amount of taxes every year, and doesn't allow for some common deductions

Select START AMT if you need to make any AMT-related adjustments including

- AMT net operating loss deduction

- Exercise or sale of incentive stock options (ISOs) <<< THIS IS MY CASE

- See Complet list [link]

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3) Given that my situation is "Sale of incentive stock options (ISOs)" I select the button "Start AMT"

4) Then I skip the page to enter "AMT Net Operating Loss Deduction" and reach the page with "AMT Adjustments and Preferences"

However in this page there is NO ENTRY to adjust the AMT for the "Sale of incentive stock options (ISOs)"

The only options I have available are for

- Circulation expenditures

- Depletion

- Installment sales

- Intangible drilling costs

- Long-term contracts

- Loss limitations

- Mining costs

- Patron's adjustment

- Pollution control facilities

- Research and experimental

- Tax shelter farm activities

- Related Adjustment

I need to enter the adjustment for the "AMT vs Regular Tax" due to a "Disposition of property ISO shares" similar to Federal Tax information (Form 6251 Part 1 line k).

Where do I enter this adjustment in the State of California Tax Return?

I trust my explanation is clear. I really need your advice on this matter.  

Let me know in either case, If you know how to do it or not

Thank you very much.

Fastredcars