Elmer exercises an incentive stock option (ISO)in 2016 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2016 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

Question

Quizplus · Accepted Answer

The AMT positive adjustment is actually $1,600 (($8,000 selling price - $6,000 exercise price) x 28% AMT rate). However, there is no AMT negative adjustment in this scenario.

Elmer Exercises an Incentive Stock Option (ISO)in 2016 for $6,000