Recommend Our Site to Your Friends!

Print This Page

Subject:   option question
Date:   Tue, 02 Sep 2003
From:   Terry

Did you ever amend a prior return to change stock sold "TO" ISO stock in order report ordinary income and avoid the AMT preference item. We held both ISO and regular stock at the time of sale. Can we go back and change our 2000 income tax return?

I need help!

Thanks,

Terry

Answer

Date:   Fri, 12 Sep 2003

Hello Terry,

Possibly, but probably not.

The sequence of stock sales is the earliest acquired is considered sold first, unless you designate to your broker that you are selling an identified block of stock.

If you didn't make an identified sale and bought the non-ISO shares after you exercised your ISO and erroneously reported the later-acquired shares as sold first, you can go back to correct the error.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.