Question

On early-exercised ISOs, Exercise price= 10, FMV at exercise= 12 and FMV on vesting= 18. AMT is 18-10= 8 (based on vesting). Form 3921 shows 10 & 12. How to enter in TT?

Forum|Forum|7 years ago
June 1, 2019
1 reply
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The AMT preference is based on the bargain element, which is based on the FMV on the latter of vesting or exercise date, minus the exercise price. The Form 3921 reports the value on the exercise date, without regard to the vesting date. TT calculates the bargain element from here as $12-$10, or $2 per share, when it should be $18-$10, or $8 per share.

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D

DavidD66

The AMT preference amount is the difference between the exercise price and the fair market value on the date of exercise. In your case, it is $2 - TurboTax is calculating it correctly. It is not the difference between value on date of vesting and exercise price.

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