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Hey TMFTaxes and everybody else out there!

I lucked out and joined web startup about 18 months ago. I had ISO stock options, which I excercised in May. The company has since gone public and done really really well.

So, it's now early march. 2 more months and I've got long-term capitol gains. But that 1 stock is like 99% of my portfolio, so I've obviously got a lot of market risk.

My question is in regards to AMT. I live in California, and I know that State Income taxes will eat away at any AMT credit I get every year. Earning enough income to collect a signifigant ammount of the AMT would be really hard.

So, any money that I pay in AMT is probably down the drain. If we assume that is true, it seems to me there is no tax disadvantage to me selling a big chunk of stock now. For example:

75,000 salary
200,000 short term capitol gains
400,000 long term capitol gains
675,000: I'd pay 28% to uncle sam

75,000 salary
600,000 long term capitol gains
675,000: I'd still pay 28% to uncle sam. Only difference is a highter % of it would be "short-term-capitol-gains" tax instead of "AMT" tax.

The only way that I can figure it makes sense not to sell some now is if long term capitol gains don't count towards AMT.

So, having provided the context, that's my big burning question. Does long-term-capitol gains count towards AMT?

If any one has any thoughts or advice, I humbly await your feedback.


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