For people who exercised ISOs this year
Sell your ISO shares this year, or hold past December 31?
Hold, and the exercise can trigger AMT. Sell the same year and the AMT goes away, but the gain is taxed like wages.
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Selling this year removes $127,876 of AMT. The sale adds $98,000 of federal tax on $280,000 of income.
Hold past December 31
- Added AMT
- $127,876on a $430,000 spread, not on cash
- Cash from a sale
- $0you still hold the shares
Sell this year
- Cash from the sale
- $300,000
- Taxed like wages
- $280,000
- Federal tax
- $98,000
- CA tax
- $30,107
- AMT from this exercise
- $0
AMT paid when you hold is not all lost. Most of it can come back in later years as a credit. See how fast
You also paid $20,000 to exercise, on either path.
California charges its own AMT on an ISO exercise you hold. It is not calculated here and could add roughly up to $30,100.
Tax year 2026. Computed just now, in your browser, by the same engine the app uses.
The app counts your other sales, vests and withholding, which change both answers.
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