topic How do I recognize AMT tax credit from sales of ISO that I sold in 2018 but exercised in 2011? in Get your taxes done using TurboTax

How do I recognize AMT tax credit from sales of ISO that I sold in 2018 but exercised in 2011?

ngc — Tue, 04 Jun 2019 00:38:34 GMT

I exercised ISO shares in 2011. I had to pay AMT in 2011. Completed AMT form 6251 in 2011 and line 16 shows difference between regular tax and AMT tax...say $100,000. I sold shares in 2018. How do I recognize the AMT credit and my understanding that I can apply against my regular tax for 2018. I don't have AMT tax in 2018.

Record the sale using the ISO "Guide me step by step" int...

TomYoung — Tue, 04 Jun 2019 00:38:36 GMT

Record the sale using the ISO "Guide me step by step" interview. You'll enter your Form 3921 information and the sale details and TurboTax will make a reversing entry on Form 6251, reducing your AMT taxable income and potentially gaining you some AMT credit.

Tom Young

Re: Record the sale using the ISO "Guide me step by step" int...

kkdas2 — Thu, 26 Sep 2019 00:49:35 GMT

How do I use ISO "Guide me step by step"? If I go through "Other Tax Situation" and select "AMT" Update, I don't see any ISO related options. If I use "ISO Exercise and Hold" in "Investment Income" under "Wages & Income", it only allows exercise (purchase) of ISO stocks.

As the original question, I exercised ISOs and paid AMT a few years ago, now I sold the stocks in 2018 and want to adjust losses against FMV, but don't know how Please help. Thanks.

Re: Record the sale using the ISO "Guide me step by step" int...

TomYoung — Thu, 26 Sep 2019 03:26:07 GMT

After entering the basic trade information on the "Tell us about your [Broker's Name] 1099-B" click the "Guide me step by step" button then on the next page select "I have sales from an Employee Stock Plan..." and, finally, "Incentive stock option plan...".

Re: Record the sale using the ISO "Guide me step by step" int...

kkdas2 — Thu, 26 Sep 2019 19:39:42 GMT

Thanks Tom, appreciated. I could do it now by editing the 1099-B entries, which I imported from the brokerage directly.

Re: Record the sale using the ISO "Guide me step by step" int...

dbrauntax — Wed, 03 Mar 2021 01:28:13 GMT

I have a similar question.

I exercised and held ISO's in 2018

I paid AMT in 2018 on the bargain element

I sold in a qualified disposition in 2021.

This article, https://turbotax.intuit.com/tax-tips/investments-and-taxes/incentive-stock-options/L4azWgfwy

Item #5: Reporting an Incentive Stock Option adjustment for the Alternative Minimum Tax, suggests that I have to adjust the AMT on form 6251.

Where can you check that the AMT basis was adjusted?

I can't access my Form 6251. If I pay before I submit, can I download my tax return and review my 6251?

Thanks for the help

Re: Record the sale using the ISO "Guide me step by step" int...

ReneeM7122 — Wed, 03 Mar 2021 15:50:36 GMT

The AMT calculation is found on Form 6521, line 3. There, you can see if the basis was adjusted. To access the area to work on it, type amt in the search box and then Jump to amt.

Line 3: Other adjustments: This line relates to any other income or deduction items that are affected by AMT differences, such as taxable IRA distributions, self-employed health insurance, IRA deductions and other income-based calculations.

Here is a TurboTax article about AMT.

Here is a TurboTax QA about AMT.

To view your tax return and view your 6251, follow these steps:

Click My Account and choose Tools.
You will then see Other Helpful Links and can select the option View Tax Summary.
Choose Preview my 1040 and you can click Back to leave the preview screen.

You should be able to see the 6251. If you pay before you submit, you can download your entire tax return with all the forms and schedules for review.

@dbrauntax

Re: Record the sale using the ISO "Guide me step by step" int...

dbrauntax — Wed, 03 Mar 2021 23:01:38 GMT

Renee,

Sale:

your response really helped. I couldn't figure out if TurboTax was magically calculating my AMT adjustment or if I had to enter it. Jumping to "amt" worked. I was able to enter my AMT adjustment (grant price * # of shares sold) in the screen titled, "Did you sell ISOs in 2020 that you purchased in a previous year?"

Exercise and Hold:

In 2020, I exercised and held shares. I entered this in the Income section under "Iso Exercise and Hold".

Under "AMT", you are asked to enter the same adjustment (bargain element) for calculating AMT owed. I assumed I should leave this blank instead of double entering it. Did I do this correctly?

1. Enter ISOs exercised under "Iso Exercise and Hold"

2. Enter $0 under the AMT section asking for ISO adjustment

Thank you for your help

Dan

Re: Record the sale using the ISO "Guide me step by step" int...

austinwe — Mon, 05 Apr 2021 12:47:34 GMT

@dbrauntax how did you get to the interview question "Did you sell ISOs in 2020 that you purchased in a previous year? I am in the same situation and cannot figure out how to get there to enter the AMT adjustment to have the higher cost basis that is needed.

Re: Record the sale using the ISO "Guide me step by step" int...

ReneeM7122 — Mon, 05 Apr 2021 22:03:31 GMT

You can get to the interview question about selling ISOs by typing ISO in the search box.

Here is a TurboTax video about Incentive Stock Options, and an article about how to report them.

@austinwe

Re: Record the sale using the ISO "Guide me step by step" int...

dbrauntax — Thu, 15 Apr 2021 22:15:58 GMT

@austinwe So sorry for the late response. Good thing taxes are due later than today.

If you 1. exercised and held in a prior year 2. sold this year in a qualified disposition. 3. you already paid AMT taxes on the shares you still need to account for an AMT adjsutment. This is done in the third tab of Turbo Tax titled "Other Tax Situations"

1. Select AMT

2. Check "I need to make an AMT adjustment to my investment income or expenses"

3. If you exercised and held ISO in 2020 this first page comes up. "If you exercised ISOs in 2020 but didn't sell the stock in 2020, you'll need to enter an adjustment for AMT purposes below" - I leave this blank because I adjust my ISO's under the INCOME tab under "Exercise and Hold." If you added a number here, it seems like it would adjust them twice.

4. Next Page is the ISO adjustment page titled "Did you sell ISOs in 2020 that you purchased in a previous year?"

Re: Record the sale using the ISO "Guide me step by step" int...

tb26 — Tue, 15 Feb 2022 16:25:40 GMT

I'm having the same issue as the original poster when doing my 2021 taxes and none of the suggested solutions seem to work for this year. Anyone figure this out?

Re: Record the sale using the ISO "Guide me step by step" int...

Anonymous_ — Tue, 15 Feb 2022 20:43:31 GMT

@tb26 See your post in the following thread.

Solved: Re: Since you confirmed that you have an ISO, you ... (intuit.com)

Re: Record the sale using the ISO "Guide me step by step" int...

RobertB4444 — Tue, 15 Feb 2022 20:44:16 GMT

@tb26 Please clarify - which of the above solutions have you tried that did not work? Entering the AMT adjustments through the 'jump to' for AMT should still work fine.

Re: Record the sale using the ISO "Guide me step by step" int...

tb26 — Tue, 15 Feb 2022 20:56:15 GMT

What did not work:

1. "Tell us about your [Broker's Name] 1099-B" click the "Guide me step by step" button. I can't find such a button.

2. "Choose Preview my 1040 and you can click Back to leave the preview screen. You should be able to see the 6251." The back button doesn't work and I cannot see form 6251.

I can do jump to AMT. That works and I do see the following option.

- "I need to make an AMT adjustment to my investment income or expenses."

However, I don't then see a question "Did you sell ISOs in 2021 that you purchased in a previous year?". There is just a generic form where I can enter net capital gain. I suppose I could manually calculate the AMT gain by calculating the AMT adjusted cost basis and subtracting from the gross proceeds but it seems like the software should do this for me. Turbotax knows the FMV at time of exercise because I entered that information in the year I exercised the options and can still see that info under "ISO Exercise and Hold". All it needs to do is ask me which options I sold this year that I purchased in a previous year and it should be able to calculate.

Re: Record the sale using the ISO "Guide me step by step" int...

GeorgeM777 — Wed, 16 Feb 2022 00:15:45 GMT

If you are using TurboTax online you will not be able to view Form 6251 during the preparation of your return. In TurboTax online, you can select Preview my 1040 to view your Form 1040 and if applicable, Schedules 1, 2, and 3. You click on Back in order to return to the step-by-step preparation of your return.

Your ISO information is entered in the Investment Income section (TurboTax online version). In the Income & Expenses section, scroll down to Investment Income, and click on the drop-down arrow to show more options. Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) and answer the questions when prompted. There will be a page which references ISO type transactions.

If you are using TurboTax desktop, the process is essentially the same. After selecting Stocks, Bonds, Mutual Funds, in the Wages & Income section, enter any relevant information. You may see a page where you can enter information about a specific stock purchase and sale. Click continue, and then the next page will inquire about less common items. Click continue, and the next page will ask about ISO purchases and sales.

@tb26

Re: Record the sale using the ISO "Guide me step by step" int...

tb26 — Wed, 16 Feb 2022 00:48:36 GMT

GeorgeM777 said - "There will be a page which references ISO type transactions."

This doesn't seem to be working. On the 1099-B page you can select the type of sale as ISO and enter all the details from the 1099-B form. But when you hit 'continue' it takes you to a page title "Adjust your cost basis to ensure your best outcome". There isn't a page which references the specifics of the ISO transaction such as the date the options were granted (needed to determine if you are >2 years from grant date) and the FMV on the date of exercise (need to compute AMT cost basis).

Re: Record the sale using the ISO "Guide me step by step" int...

GeorgeM777 — Wed, 16 Feb 2022 02:34:04 GMT

We need to modify the previous response regarding where to enter your ISO information. The starting point is not Stocks, Cryptocurrency, Mutual Funds, Other, but rather ISO Exercise and Hold in the Investment Income category.

In an earlier post you mentioned that you were not able to see the question "Did you sell ISOs in 2021 that you purchased in a previous year?" After selecting ISO Exercise and Hold, we continued through the application and did see the question regarding the sale of ISOs in 2021 that were purchased in a previous year. That question appeared after the page that asked about less common situations. Included below are the relevant screens.

@tb26

Re: Record the sale using the ISO "Guide me step by step" int...

tb26 — Wed, 16 Feb 2022 22:53:47 GMT

Thanks. I don't see this screen. I'm thinking it's because I don't owe any AMT. So a negative adjustment to AMT income doesn't matter. If I did owe AMT maybe it would show?

Re: Record the sale using the ISO "Guide me step by step" int...

JulieS — Tue, 22 Feb 2022 14:41:52 GMT

Here is how to find those screens in TurboTax:

Open your tax return.
Select Federal on the left.
Select Other Tax Situations, toward the top center.
To the right of Alternative Minimum Tax (AMT), select Start or Revisit.
Answer the question Yes and Continue.
On the question, Do you have any of these uncommon situations? select the first option.
Fill in the information as shown above.