Exercising incentive stock options and holding can trigger the alternative minimum tax — on a 'paper' gain you haven't sold. Enter your shares, strike, and current value to see the bargain element, the AMT it likely adds, and the cash you need to exercise.
Exercise
$
$
Tax
%
AMT on the spread (estimate)
$13,000
before exemption & credit
Bargain element (paper gain)
$50,000
Cash to exercise
$10,000
The numbers
AMT income added
$50,000
US$19.99 · download & own it forever
Prices in
🎁 Send this calculator as a gift
After payment you'll get a gift link + printable card to send.
How it's calculated
Bargain element = (fair market value − strike) × shares — your paper gain at exercise.
Holding ISOs past year-end adds the bargain element to AMT income.
Estimated AMT ≈ AMT income × AMT rate (26% up to ~$232k, then 28%); a real return nets it against regular tax.
Holding exercised ISOs past the calendar year adds the bargain element to your AMT income — so you can owe AMT on a gain you haven't cashed out. This is the classic ISO trap.
How do I avoid the AMT hit?
Common strategies include exercising early when the spread is small, or exercising-and-selling in the same year (a disqualifying disposition). This is an estimate — consult a tax pro.