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Level 1

How/where do I report exercise of Incentive Stock Options? Do I need to report in Federal Tax, in addition to CA state tax? Which line item within the AMT section?

I exercised some ISO stock options. I completed the California state tax AMT section. It says "Enter other incentive stock options - if you excluded any California stock options CQSO proceeds from your income, enter the amount for alternative minimum tax purposes". What should this value signify? I believe I entered the amount for the [(fair market value of shares) - (option exercise price)] * (number of options exercised)


Also, I couldnt find on federal tax AMT section a place to enter this. Would it count as "Gross Investment Income" section? 

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Level 9

How/where do I report exercise of Incentive Stock Options? Do I need to report in Federal Tax, in addition to CA state tax? Which line item within the AMT section?

Go back into the California tax program and undo anything that you did with respect to filing out the California AMT Schedule P(540).  The California AMT information should generally flow from the Federal AMT information.

There's a specific definition of California Qualified Stock Options (CQSO) and it's unlikely you have any:

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California Qualified Stock Options

California R&TC section 17502 provides that a stock option specifically designated as a California qualified stock option will receive the favorable tax treatment applicable to incentive stock options and employee stock purchase plans. In order to receive this treatment, the following conditions must be met:

1. The option is issued after January 1, 1997, and before January 1, 2002.

2. The earned income of the employee to whom the option is issued does not exceed $40,000 in the tax year in which the option is issued.

3. The number of shares of stock granted under the option does not exceed 1,000, and the value of the shares does not exceed $100,000.

4. The employee must be employed by the company at the time the option is granted or must have been employed within three months (one year if permanently disabled) of the date the option is granted.     
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Use the "ISO Exercise and Hold" interview under the "Investment Income" section of the "Your 2018 Income Summary" page to tell TurboTax about the stock acquired via an ISO in 2018 that you did not sell by the end of the year.

Tom Young