Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: mathetes Big red star, 1000 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123155  
Subject: Re: ISOs: What is Basis for AMT Date: 11/26/2001 12:31 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
When I exercise ISOs what is the Basis for AMT purposes? The average market price (mean of high and low) on the exercise date?

What do you mean by "exercise"? Buy and Hold? or Buy and Sell? If the latter, there's no AMT involved at all.

If the former, holding for at least a year, then your intial AMT exposure is the difference between the strike price and the market price on the day of exercise. That's usually determined as the mean of the day's high and low, as you describe.

And that is the price that becomes your "AMT Basis" for use if and when you subsequently, after a year or more, get around to selling the stock. At that point, in filing your taxes, you'll fill out two Schedules D, the normal tax return showing the strike price, the AMT tax return based on the higher basis. And then you'll fill in Forms 6251 and 8801 as needed......

For more on this whole process, you'd do well to do some reading at and

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Berkshire Hathaway

Questioning Amazon's Financials
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.