I exercised an ISO, and did not sell. Why am I taxed with such a high AMT calculation?

[hechkas]

Publication 525, page 12 the AMT paragraph states that if the stocks acquired under ISO is not transferable (can not be sold) then there is no adjustment needed on line 2i.  I exercised the option and acquired the stock and got form 3291without any tax withholding.  Also Investopedia states, "However, the adjustment is required only if your rights in the stock are transferable and not subject to a substantial risk of forfeiture in the year the ISO is exercised. And the fair market value of the stock for purposes of the adjustment is determined without regard to any lapse restriction when rights in the stock first become transferable or when the rights are no longer subject to a substantial risk of forfeitur."  My company is a small start up.  It has not IPOed yet and I can not sell 180 days after it goes public.  It is not like Microsoft that it's stock can readily give the market value.  Do I have to do AMT and pay $20,000 tax when I can not do anything with that stock for many years from now?  the company may even go bankrupt.  Thank you.

[drdlangley]

I was planning to retire and must sell or exercise my ISO options within 90 day after retirement or loss them.  I exercised to buy and hold.  My company stock took a nosedive during a blackout period so was unable to sell.  Now I have an unbelievable AMT.  My retirement has been robbed from me.  How do I recover the AMT credit?

I do not want to hear about what I should of done, but am very interested in solutions.  What froms so the AMT credit?

Thank You 

[GeorgeM777]

Because you made the necessary AMT adjustment in the year of exercise, then in the year that you sell the stock, you are allowed to make a "negative" adjustment for AMT purposes.   If you decide to sell your stock, then in TurboTax online, you should select Other Tax Situations (left margin) and thereafter select Alternative Minimum Tax.  On the screen, Do you have any of these uncommon situations? select the most appropriate option.  At the screen, Did you sell ISOs in 2022 that you purchased in a previous year? is where you will enter your AMT adjustment.  

If you are using TurboTax CD/download, the process is very similar.  

@drdlangley 

[drdlangley]

Thank you.