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Level 1
posted Mar 26, 2024 7:43:23 AM

Is the cost basis for employee stock options exercised based on FMV?

Back in 2014 I exercised employee stock options at a price of $18.73.  The FMV at the time was $56.41 and I had to pay AMT based on the FMV even though I did not sell my shares that year.  I sold some shares in 2019 which used up the majority of the AMT credit carryforward.  This year I sold the remainder of the shares.  Is the cost basis the FMV price of $56.41 or the exercise price of $18.73 since my AMT credit carryforward is zero now or is that not a factor?  Thanks!

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1 Replies
Expert Alumni
Mar 26, 2024 7:59:31 AM

The cost basis of your shares resulting from the exercise of the stock options is $56.41 per share, which is the exercise price plus the discount element on which you have already paid taxes at the time of exercise..