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timo-repo
New Member

How to report ISO bargain element if I do not qualify for AMT this year?

Exercised ISO options in 2017.  This created AMT adjustment and increased my overall tax liability in 2017.  I sold the shares in 2018 (qualifying position).  However, 2018 my AMT tax liability is lower than regular tax liability due to the AMT adjustment created by my the 2017 ISO adjustment.  Therefore, I do not qualify for AMT this year.

How can I adjust my tax liability in 2018 to reflect the fact that I already paid taxes for the bargain element in my 2017 return?

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1 Reply
DDollar
Expert Alumni

How to report ISO bargain element if I do not qualify for AMT this year?

The Prior-Year Minimum Tax Credit - Form 8801, lets you get back money you paid as an Alternative Minimum Tax (AMT) in a prior year. You can only claim this credit in a year when you don’t have to pay AMT. You can’t use the credit to reduce your AMT liability in the future. However, you can carry over any unused portion of the credit to future years.  To claim the credit, when you get to the screen that asks if you paid AMT in the past and had timing items, answer Yes and follow our onscreen instructions to calculate the credit.  If you are using the Desktop program, you can switch to Forms mode, and click on "Open Form", type in 8801, and click on Open.  You will need your 2017 Form 6251 to complete the form.


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