AMT and Equity Compensation
Alternative minimum tax, nonqualified stock options, incentive stock options and other forms of equity compensation.
AMT Loss Carry forward
Posted by: ADAM, September 20, 2015 11:20PM
Paid 35K to exercise ISO stocks in 2011 worth 350K. AMT basis is 350K. Stocks were worthless and the company was liquidated in 2014. Received a proceeding of 3K for the stocks.

Capital loss for 2014 is 32K and AMT loss is 347K and there are no other gains in 2014. In this scenario what is the negative adjustment that can be applied to line 17 in form 6251 ? If this is limited to 3K loss, can the AMT loss be carried forward for subsequent years ?

Re: AMT Loss Carry forward
Posted by: triad, September 23, 2015 07:06PM
1. AMT is also limited to ($3000) per year.
2. Your regular 1040 loss is already ($3000), so your adjustment is $0.
3. Yes, the AMT loss is carried forward--though it uses up $3000 a year.

Re: AMT Loss Carry forward
Posted by: Kaye Thomas, October 6, 2015 12:13PM
Note that these losses combine with any other capital gains and losses you may have. Each year you prepare two versions of Schedule D, one for regular income tax and one for AMT (using the larger loss carryover), and the difference becomes your adjustment.

As long as you have a $3,000 loss for regular income tax (which could be as long as 10 years given the $32,000 regular tax loss) you will have no adjustment. But let's suppose you have other capital gains that not only wipe out your regular tax loss but give you an overall $10,000 gain for regular tax purposes. You would still have enough AMT loss to absorb all that gain and also show a $3,000 capital loss for AMT purposes. In this case your adjustment would be $13,000, the difference between a $10,000 gain for regular tax purposes and a $3,000 loss for AMT purposes.

Kaye Thomas
Fairmark.com



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