Replies

Thanks for your comments, and the reference. I didn't say anythign about withholdoing for ISO's....only for the NQSOs..and sadly the problems it causes....Re the AMT, are your saying that you feel that one does or doesn't owe the AMT. The IRS is itself confused, or conflicted, may be a better term, but CPA's I've spoken to seem to feel that the issue of the "credit" for the AMT, which can be taken when you ultimately sell the stock, means thatthe AMT tax is due the year the ISO is exercised, because, I mean, how can you earn a credit if you haven't already paid the tax?

Again, I hope I didn't provide wrong info. I believe what I wrote is correct, as is understood. Also, individuals in this case nearly always go to tax professionals for guidance, and most aren't willing to sign off on theadvice to exclude it from the AMT.....

Re the AMT, are your saying that you feel that one does or doesn't owe the AMT. The IRS is itself confused, or conflicted, may be a better term, but CPA's I've spoken to seem to feel that the issue of the "credit" for the AMT, which can be taken when you ultimately sell the stock, means thatthe AMT tax is due the year the ISO is exercised, because, I mean, how can you earn a credit if you haven't already paid the tax?

I believe the AMT is not owed on an exercised ISO.

When I showed section 83g to my accountants, their jaws bounced off the floor. All CPA's are licensed by the IRS. The IRS literally holds their careers in the IRS's hands. Only the most agressive will buck the IRS.

The CPA community tends to circle the wagons around their own as well, and they follow the opinion of whomever is the 'leading CPA'. Well if that leader hasn't done their homework, or won't publicly take an adverse stance, that sets the thinking in all the follower CPA's as well.

Then you also get the problem, if you ultimately convince them, that they've been mis-trained by the IRS and mislead by their peers, they're in a the awkward position of filing an ISO exercise a new way, inviting the scrutiny of the IRS and risking their license, and further risking being sued for malpractice by previous clients who paid the AMT on ISO's.

So they don't change, and don't rock the boat.

Show section 83g to your accountant and they'll either confess ignorance ('well gee that's tax law stuff and I rely on my trusty IRS example sheet'), or rely on the reputations of others ('you must be wrong because so and so wouldn't make a mistake and knows more about it than you'), or they'll scratch their heads.