The exercise of an incentive stock option (ISO) increases both the AMTI and regular taxable income in the year of exercise.

Name: The exercise of an incentive stock option (ISO) increases both the AMTI and regular taxable income in the year of exercise.
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Question

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The exercise of an ISO increases the Alternative Minimum Tax Income (AMTI) but not the regular taxable income in the year of exercise. Regular taxable income is affected when the stock is sold.

The Exercise of an Incentive Stock Option (ISO) Increases Both