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No. of Recommendations: 3
Everything Peter said is correct. You have to run the numbers.

I would add another question. You didn't indicate if these are qualified/incentive stock options (ISOs) or nonqualified options (NSOs). The difference is that an NSO is treated as regular compensation for all purposes, not just AMT.

An NSO, therefore, seldom results in a significant AMT liability all by itself.

An ISO, however, does have significant AMT ramifications.

But if you're going to turn around and resell the stock after you exercise, (or within a year) it won't make any difference which kind it is. You will have regular ordinary income either way.

Also be aware that if you do have an AMT liability, it's a deferral item, which results in a minimum tax credit carryforward. You also have a higher basis in the stock for AMT purposes. Just a couple more things to keep track of.

Bill

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