Calculating and limiting the alternative minimum tax (AMT) in connection with incentive stock options (ISOs) is complex and can be confusing. On myStockOptions.com, the basic facts and issues of the AMT and ISOs are presented in our perennially popular article Dr. Strange Tax, Or: How I Learned To Stop Worrying And Love The AMT. (Film buffs will surely recognize the allusion.) Learning to love the hated AMT: how could we ever top that feat of tax-planning bravado?
Well, we have. This week, we published an article on ISO tax planning that shows how the AMT can become not just something you learn to live with but actually a sophisticated acquired taste. Indeed, the authors even go so far as to compare the AMT to "an upscale eating club with a high fee to get in the door—but once you're inside, the meals are tasty and cheap." In The Alternative Minimum Tax Sweet Spot: Planning Opportunities, financial advisors Tom Davison and William Whitaker take a look at an advanced tax-planning technique that can turn the top AMT rate of 28% to your advantage if you are in a high tax bracket for ordinary income but get socked with the AMT after an ISO exercise-and-hold. Intrigued? We were too. Read the article to find out the workings of the AMT Sweet Spot.
For an appetizer (or perhaps dessert), you may also want to peruse our other content on the alternative minimum tax. On myStockOptions.com, you can find plenty of articles and FAQs on the AMT, running through topics from the basic to the complex, in the sections ISOs: AMT and ISOs: AMT Advanced.
Comments