Annualized Installment Income for Exercised ISO?

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  • #16660
    esetter
    Participant

    My son is incurring an underpayment penalty most of which is attributable to ISO options that were exercised in November. As I look at form 2210’s schedule AI, it doesn’t appear as if the “discount” on the ISO exercise can be annualized – probably because it is part of the AMT calculation, not the regular tax calculation. Is there any way that the AMT calculation can also use a similar “annualization” method?

    #16727
    Kaye Thomas
    Moderator

    Line 16 in Schedule AI is where you annualize AMT. Page 11 of the Form 2210 Instructions explains how to do this.

    #16753
    esetter
    Participant

    Thank you very much. I didn’t realize that line included the AMT tax. I guess you’ve proven that old adage, “when all else fails, read the instructions”.

    Thanks again.

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