Let me start by saying how crazy the AMT seems to be. I'm wondering if someone could possible help explain to me in very simple terms...
Here is my situation. In 2022, I exercised ISOs of shares around $35. I did not sell them looking to hold for LTCG. So I paid AMT @ 28% on a $183k bargain element.
The stock is now trading at around $20 (oof) and I am looking to diversify. So I would be selling for about $113k profit, $70k less than I paid taxes on for AMT (about $20k extra - 183 * 28%). Additionally, as of right now, I will have a carryforward AMT credit of $70k for 2024.
I diversified some of my other holdings and in 2024 our income will be about $800k. Next year it will be closer to $400k.
We are trying to determine the optimal way to diversify over time. And trying to figure out if it makes more sense to sell some of these shares this year where it will all be taxed at 20% LTCG, but maybe has a greater difference between AMT this year netting us more of the credit....or wait until next year and have a big chunk of it fall into the 15% LTCG bracket.
I find the AMT so confusing that I just want to make sure I'm not making a big mistake here. Generally, we are looking to diversify over time and are comfortable with the amount we have in company stock today, but also don't want to let the tax tail wag the dog here. I've made that mistake before.
Here is my situation. In 2022, I exercised ISOs of shares around $35. I did not sell them looking to hold for LTCG. So I paid AMT @ 28% on a $183k bargain element.
The stock is now trading at around $20 (oof) and I am looking to diversify. So I would be selling for about $113k profit, $70k less than I paid taxes on for AMT (about $20k extra - 183 * 28%). Additionally, as of right now, I will have a carryforward AMT credit of $70k for 2024.
I diversified some of my other holdings and in 2024 our income will be about $800k. Next year it will be closer to $400k.
We are trying to determine the optimal way to diversify over time. And trying to figure out if it makes more sense to sell some of these shares this year where it will all be taxed at 20% LTCG, but maybe has a greater difference between AMT this year netting us more of the credit....or wait until next year and have a big chunk of it fall into the 15% LTCG bracket.
I find the AMT so confusing that I just want to make sure I'm not making a big mistake here. Generally, we are looking to diversify over time and are comfortable with the amount we have in company stock today, but also don't want to let the tax tail wag the dog here. I've made that mistake before.
Statistics: Posted by berg — Tue Feb 27, 2024 2:31 pm — Replies 0 — Views 24