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URL:  http://boards.fool.com/gt-subject-stopck-option-iso-cost-basis-gt-11898522.aspx

Subject:  Re: Stopck Option (ISO) Cost Basis Date:  1/31/2000  12:16 AM
Author:  WallyJr Number:  26424 of 121341

> Subject: Stopck Option (ISO) Cost Basis
> Author: baderl Date: 1/29/00 3:36 PM Number: 26309

In 1997, we had to exercise 'Incentive Stock Options' granted to my wife. The option were granted to her in 92. The option price was 8. When we exercised, the stock price was 20. We reported the difference (20 - 8 = 12) as an AMT item in calculatin the AMT tax for 1997 (again done with TTax). We still have the stock. If we sell the stock in this year (ie. 2000), what is the cost basis of the stock. Is it still 8 (original price the stock was boought at) or is it 20?


<< The basis is still $8. (The basis only changes if you exercise NQOs).

Cheetah>>

Cheetah, you are half right. For regular tax purposes the stock basis is $8. For AMT purposes the basis is $20. The adjustment for the difference of $12 per share is entered on line 9 of 6251 as a negative number.

Also baderl you may have a AMT Credit available from 1997. Check if you have a completed Form 8801 for 1997. If not, complete it for 1997 and 1998 and see what is the result.
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