Personal Finance & Money Asked on December 29, 2020
Due to an ISO exercise, I must pay AMT this year. But this was a one-time thing: I will probably not need to pay AMT next year.
Since ISO exercises are considered a "deferral item", my understanding is this will result in being able to claim an AMT tax credit in subsequent years.
If this is correct so far, is the credit limited to the difference between what I would have paid without AMT, versus what I had to pay? In other words, the extra tax I must pay due to AMT: will I get it back eventually?
I’m wondering because AMT does not allow the standard deduction, and my itemized deductions don’t sum to anywhere near the standard deduction. So:
If AMT credits are limited to the difference between standard tax and AMT, might it make sense to take the standard deduction this year since after the credit is claimed in subsequent years I will have paid less tax overall, even if I paid more this year?
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