AMT 2015 ISO 10k 2016 AMT refund only 1k doesn't increase overall return? Why use this at all?

[firejj69]

AMT 2015 ISO options say 10,000. I didn't sell these options and I didn't hit AMT this year. When I entered the AMT carryforward I could only get back 1,000 of the 10,000 that paid last year, however this amount didn't change my overall refund?   Can I just carryforward the whole amount as it's not helping increase my refund this year?  

[TomYoung]

"AMT 2015 ISO options say 10,000."

What does that mean?

"When I entered the AMT carryforward"

I don't understand what that means.  

Did you use TurboTax last year and enter the 2015 ISO exercise in the "ISO Exercise and Hold" interview?  Did you use the ISO step by step process to report the 2016 sale?

I simply don't understand what's happening here.  But if you were subject to AMT last year it's not "automatic" that you get the AMT amount back this year.  The AMT isn't simply a "timing difference" where you can figure "well I got hit hard this year but I'll get that all back next year when I sell."

[firejj69]

Yes I used Turbo Tax last year 2015. I exercised some options, but I"m holding them for 1 year to get long term when I decide to sell.  This caused an AMT tax bill of 10,000.   My understanding is that since I didn't sell and I'm holding that I would get this AMT Tax back as a credit.  This doesn't seem to be the case?   What I'm confused on is the AMT carryforward showed 1,000 out of the 10,000 but that didn't change the overall refund. I'm guessing this is due to the fact I didn't hit AMT this year.

[TomYoung]

"My understanding is that since I didn't sell and I'm holding that I would get this AMT Tax back as a credit.  This doesn't seem to be the case?"

Yes, that's not the case.  You may get some or all of the AMT tax back as a credit but that's very much an "it depends" situation.  Remember in EVERY year you pay tax on the HIGHER of the regular tax or the AMT.  Simply getting the AMT back as a credit the next year violates that principal. 

When you sell you should use the ISO step by step interview to report the sale.  That will create a "reversing" entry on Form 6251 for the "spread" you reported as an "originating" entry via the "ISO Exercise and Hold" interview.

Tom Young