How do I recognize AMT tax credit from sales of ISO that I sold in 2018 but exercised in 2011?

[ngc]

I exercised ISO shares in 2011.  I had to pay AMT in 2011.  Completed AMT form 6251 in 2011 and line 16 shows difference between regular tax and AMT tax...say $100,000.  I sold shares in 2018.  How do I recognize the AMT credit and my understanding that I can apply against my regular tax for 2018.  I don't have AMT tax in 2018.

[TomYoung · Accepted solution]

Record the sale using the ISO "Guide me step by step" interview.  You'll enter your Form 3921 information and the sale details and TurboTax will make a reversing entry on Form 6251, reducing your AMT taxable income and potentially gaining you some AMT credit.

Tom Young

[kkdas2]

How do I use ISO "Guide me step by step"? If I go through "Other Tax Situation" and select "AMT" Update, I don't see any ISO related options. If I use "ISO Exercise and Hold" in "Investment Income" under "Wages & Income", it only allows exercise (purchase) of ISO stocks.

As the original question, I exercised ISOs and paid AMT a few years ago, now I sold the stocks in 2018 and want to adjust losses against FMV, but don't know how Please help. Thanks.

[TomYoung]

After entering the basic trade information on the "Tell us about your [Broker's Name] 1099-B" click the "Guide me step by step" button then on the next page select "I have sales from an Employee Stock Plan..." and, finally, "Incentive stock option plan...".

[kkdas2]

Thanks Tom, appreciated. I could do it now by editing the 1099-B entries, which I imported from the brokerage directly.

[dbrauntax]

I have a similar question. 

I exercised and held ISO's in 2018

I paid AMT in 2018 on the bargain element

I sold in a qualified disposition in 2021.

This article, https://turbotax.intuit.com/tax-tips/investments-and-taxes/incentive-stock-options/L4azWgfwy

Item #5: Reporting an Incentive Stock Option adjustment for the Alternative Minimum Tax, suggests that I have to adjust the AMT on form 6251.

Where can you check that the AMT basis was adjusted? 

I can't access my Form 6251. If I pay before I submit, can I download my tax return and review my 6251?

Thanks for the help

[ReneeM7122]

The AMT calculation is found on Form 6521, line 3.  There, you can see if the basis was adjusted.  To access the area to work on it, type amt in the search box and then Jump to amt.

Line 3: Other adjustments: This line relates to any other income or deduction items that are affected by AMT differences, such as taxable IRA distributions, self-employed health insurance, IRA deductions and other income-based calculations. 

Here is a TurboTax article about AMT.

Here is a TurboTax QA about AMT.

To view your tax return and view your 6251, follow these steps:

1. Click My Account and choose Tools.
2. You will then see Other Helpful Links and can select the option View Tax Summary.
3. Choose Preview my 1040 and you can click Back to leave the preview screen. 

You should be able to see the 6251.  If you pay before you submit, you can download your entire tax return with all the forms and schedules for review.  

@dbrauntax

[dbrauntax]

Renee,

Sale:

your response really helped. I couldn't figure out if TurboTax was magically calculating my AMT adjustment or if I had to enter it. Jumping to "amt" worked. I was able to enter my AMT adjustment (grant price * # of shares sold) in the screen titled, "Did you sell ISOs in 2020 that you purchased in a previous year?"

Exercise and Hold: 

In 2020, I exercised and held shares. I entered this in the Income section under "Iso Exercise and Hold". 

Under "AMT", you are asked to enter the same adjustment (bargain element) for calculating AMT owed. I assumed I should leave this blank instead of double entering it.  Did I do this correctly?

1. Enter ISOs exercised under "Iso Exercise and Hold"

2. Enter $0 under the AMT  section asking for ISO adjustment

Thank you for your help

Dan

[austinwe]

@dbrauntax how did you get to the interview question "Did you sell ISOs in 2020 that you purchased in a previous year? I am in the same situation and cannot figure out how to get there to enter the AMT adjustment to have the higher cost basis that is needed. 

[ReneeM7122]

You can get to the interview question about selling ISOs by typing ISO in the search box.

Here is a TurboTax video about Incentive Stock Options, and an article about how to report them.

@austinwe

[dbrauntax]

@austinwe So sorry for the late response. Good thing taxes are due later than today.

If you 1. exercised and held in a prior year 2. sold this year in a qualified disposition. 3. you already paid AMT taxes on the shares you still need to account for an AMT adjsutment. This is done in the third tab of Turbo Tax titled "Other Tax Situations"

1. Select AMT

2. Check "I need to make an AMT adjustment to my investment income or expenses"

3.  If you exercised and held ISO in 2020  this first page comes up. "If you exercised ISOs in 2020 but didn't sell the stock in 2020, you'll need to enter an adjustment for AMT purposes below" - I leave this blank because I adjust my ISO's under the INCOME tab under "Exercise and Hold." If you added a number here, it seems like it would adjust them twice.

4. Next Page is the ISO adjustment page titled "Did you sell ISOs in 2020 that you purchased in a previous year?"

[tb26]

I'm having the same issue as the original poster when doing my 2021 taxes and none of the suggested solutions seem to work for this year. Anyone figure this out?

[tagteam]

@tb26 See your post in the following thread.

Solved: Re: Since you confirmed that you have an ISO, you ... (intuit.com)

[RobertB4444]

@tb26  Please clarify - which of the above solutions have you tried that did not work?  Entering the AMT adjustments through the 'jump to' for AMT should still work fine.

[tb26]

What did not work:

1. "Tell us about your [Broker's Name] 1099-B" click the "Guide me step by step" button. I can't find such a button.

2. "Choose Preview my 1040 and you can click Back to leave the preview screen.  You should be able to see the 6251." The back button doesn't work and I cannot see form 6251.

I can do jump to AMT. That works and I do see the following option.

- "I need to make an AMT adjustment to my investment income or expenses."

However, I don't then see a question "Did you sell ISOs in 2021 that you purchased in a previous year?". There is just a generic form where I can enter net capital gain. I suppose I could manually calculate the AMT gain by calculating the AMT adjusted cost basis and subtracting from the gross proceeds but it seems like the software should do this for me. Turbotax knows the FMV at time of exercise because I entered that information in the year I exercised the options and can still see that info under "ISO Exercise and Hold".  All it needs to do is ask me which options I sold this year that I purchased in a previous year and it should be able to calculate.