topic Are ESPP stock purchases considered ISOs for AMT consideration? in Get your taxes done using TurboTax

Are ESPP stock purchases considered ISOs for AMT consideration?

pgskttax — Wed, 07 Oct 2020 07:43:26 GMT

In TurboTax Deluxe, Federal Taxes - Other Tax Situations - Alternative Minimum Tax (AMT) :
The first question is "Do you have any of these uncommon situations? Select all that apply to your 2019 taxes"
The first item under the question is
- I exercised ISOs in 2019, but didn't sell the stock in 2019. Or I sold ISOs in 2019 that I purchased in a previous year.

*I would like to know if this item applies to my situation or not.*

In 2019, I purchased stock at a discount on the Fair Market Value under my company's Employee Stock Purchase Plan (ESPP). The shares were transferred to me on March 14th, 2019 and Sept 13th 2019. There is a 6 month holding period on ESPP stock and I did not sell any of it in 2019.

I received a 2019 Form 3922. On the Form 3922 Box 1 "Date option granted" is listed as Sept 19, 2018 and March 15 2019. Box 2 "Date option exercised" is listed as March 14th, 2019 and Sept 13th, 2019 respectively - the dates the stock was transferred to me.

I also sold ESPP stock in 2019 that I had acquired in 2017.

Are either of these ESPP stock purchases or sales considered an ISO excersized or sold and must be figured in ATM computation per the first item above?

Thank you!!

Re: Are ESPP stock purchases considered ISOs for AMT consideration?

TomYoung — Wed, 07 Oct 2020 19:39:39 GMT

"Are either of these ESPP stock purchases or sales considered an ISO excersized or sold and must be figured in ATM computation per the first item above?"

No. ISOs and ESPPs are both considered "Statutory Stock Options" but operate under different rules. For ESPPs there's no similar rule to ISOs where stock not sold by the year end in which the option was exercised are an AMT adjustment item.

For stock acquired via ESPPs there Qualified and NonQualified dispositions and the grant dates and how long you owned the stock determines that. If you use the ESPP step by step interview and enter the Form 3922 information, TurboTax will handle this correctly.

Re: Are ESPP stock purchases considered ISOs for AMT consideration?

pgskttax — Thu, 08 Oct 2020 07:09:23 GMT

Thank you!