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Add me to the list of people confused by AMT ....
I have a client that exercised ISO's and incurred AMT preference income of about $1.2 million in 2021 and 2022. The exercise price was about $1. She had a carryforward MTC of about $260k
In 2023, she exercised another $1.2 million value of ISO's, and sold about $1 million of the previously exercised ISO shares. The stock had declined since the 2021 and 2022 ISO exercises, and she sold it for about 1/2 of the FMV of the exercise.
So she has an AMT loss, and a huge regular tax gain of $800k. I entered the AMT basis into the appropriate box on the Dispositions screen 17.1
I would have thought that the huge AMT losses would offset her regular tax gains. But no, she actually gets no MTC (because she incurred AMT in 2023??) and only $3000 of the AMT loss is used. She owes $350k and is (very) not happy.
Am I doing something wrong? Is there a different way to enter into Lacerte that will get to a better result for her?
Thanks!
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