Elmer exercises an incentive stock option (ISO) in 2015 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2015 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

Question

Quizplus · Accepted Answer

The AMT positive adjustment is the difference between the fair market value at exercise ($7,600) and the exercise price ($6,000), which is $1,600. However, there is no AMT negative adjustment in the same year as the sale; the negative adjustment occurs when the stock is sold in a qualifying disposition.

Elmer Exercises an Incentive Stock Option (ISO) in 2015 for $6,000