Hi,
I exercised some stock options and sold them in the same year in 2023. Should I still report them according to the form 3921 in the turbotax since which will trigger AMT.
Thanks!
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The Alternative Minimum Tax (AMT) will not be an issue because you exercised and sold within the same tax year. AMT is only an issue if you exercise and hold past year end, in which case the bargain element of your options is a preference item (income) for calculating AMT (but not regular tax). Your sale is a disqualifying sale, which means you probably have to recognize the bargain element as ordinary income. The bargain element is the difference between the amount you paid (your exercise price) and the market price at the time you you exercised (bought) the stock. This amount should already be included in the total wages reported in Box 1 of your 2023 Form W-2 because this is a "disqualifying sale." If the bargain element is not included in Box 1 of your 2023 Form W-2, you must add it to the amount you're reporting as compensation as "Other Income" on your Form 1040. Your basis in the stock is the amount you paid, plus the amount of the bargain element. If you did not exercise and sell right away (i.e. you held the stock for a while) if the price went down after exercising, then the amount to be included as compensation is the difference between the sales price and the exercise price. If the stock price went up, the amount of increase above the market price at exercise is a short term capital gain, and your ordinary income is the bargain element at the time of exercise. For additional information, see the TurboTax Help Article: Incentive Stock Options
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