I'm in AMT Hell - anyone understand how to recover AMT Credit from ISO exercise?
If you don't know what AMT or ISOs are skip this (it'll make your head spin!)
If you understand how to recover AMT credit caused by an ISO exercise please help me. My head is spinning!
In 2000 an ISO exercise produced an AMT adjustment of $150K which caused $30K in AMT to be payed. Regular basis is $200. In subsequent years I used the AMT credit and now have $14K remaining. This year I sold the stock for $40,000. I'm trying to figure out how to draw down my remaining AMT credit as quickly as possible. So,
Reg Gain: 39,800
AMT Gain: -110,000 (40,000 - 150,000)
2006 AMT Gain: -3000 (limited)
2006 Adjustment: = -42800 (-3000 - 39800)
Form 6251 Line 16: -42800
2007 AMT Captital Loss Carryover = -107,000
If I plug these numbers in I get to use 7,000 in AMT credit, so I'll have 7,000 credit remaining. Since the law is changing for 2007, I should be able to use this credit over the next 2 years (5,000 then 2,000). I'll also have -3000 in AMT adjustments each year (line 16 6251) until the -107,000 is used. (That'll take 35 years!!)
It seems strange that I can't recoup my AMT credit after selling the original ISOs that caused the tax.
I'm not certain the above is correct. Can someone with better knowledge please confirm?