How do I enter the AMT cost basis for the sale of stock obtained in a previous year through an incentive stock option exercise?

Forum|Forum|3 years ago
April 7, 2023
1 reply
0 views

I have stock obtained from exercising an incentive stock option in a previous year. I can enter the ordinary cost basis when filling out the 1099-B page under investments. There's also a dropdown for "What type of investment did you sell?", allowing one to specify "Incentive stock options (ISO)". However, this doesn't appear to activate additional form options to include the AMT basis somewhere.

This is important, because as a qualifying disposition (long-term held), there is a different Schedule D calculation for investment gain for AMT versus non-AMT. How do I get Turbotax to calculate that correctly?

TurboTax Premier Online

wyrwaswangAuthor

I have tried fixing this manually under the AMT section by selecting "I need to make an AMT adjustment to my investment income or expenses"

I put the (negative) difference in AMT versus non-AMT cost basis under the question: "Enter any AMT adjustments you need to make to your investment income. You can enter positive or negative numbers." "Gross investment income".

This option appears to have no effect, and regardless of what is entered, it doesn't change what TurboTax lists as "Alternative minimum taxable income."

GeorgeM777

If you have not already obtained a solution, you might consider going back to the screen Do you have any of these uncommon situations and selecting the first option, I exercised ISOs in 2022, but didn't sell the stock in 2022. Or I sold ISOs in 2022 that I purchased in a previous year. Then follow these steps:

On the screen, OK, let's get the info for your incentive stock options (ISOs). Do not enter anything here. Select Continue.
On the screen, Did you sell ISOs in 2022 that you purchased in a previous year? Here is where you can enter your ISO adjustment. You will probably be entering a negative amount. There are two fields, one for short-term g/l and one for long-term g/l.
If you prefer, you can click on the Learn more link for some additional information about the AMT adjustment.
Then continue through the rest of the application.

The above steps are found in TurboTax online. However, the steps are very similar in TurboTax CD/download. Also, remember to begin the entire process in the Other Tax Situations section and thereafter select the first category, Alternative Minimum Tax. Post additional questions or observations as appropriate.

@wyrwaswang

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"