In 2010,Daniel exercised an incentive stock option (ISO),acquiring stock with a fair market value of $210,000 for $165,000.His AMT basis for the stock is $210,000,his regular income tax basis for the stock is $165,000,and his AMT adjustment is $45,000 ($210,000 - $165,000).

Question

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This statement is true. The AMT basis for ISO stock is the fair market value at the time of exercise, while the regular income tax basis is the amount paid for the stock. Therefore, Daniel's AMT basis is $210,000 and his regular income tax basis is $165,000. The AMT adjustment is the difference between the AMT basis and the regular income tax basis, which in this case is $45,000 ($210,000 - $165,000).

In 2010,Daniel Exercised an Incentive Stock Option (ISO),acquiring Stock with a Fair