ISO exercise planning math at a glance.

1. Step 1

   Pull ISO grants

   Export ISO grants outstanding (or paste manually). Each row carries strike, current FMV, exercisable shares, and the proposed exercise count.

2. Step 2

   Set assumptions

   Confirm filing status, AMT exemption, phaseout start, bracket breakpoint, regular-tax slider, and ordinary income estimate. The defaults are editable; the engine never invents numbers.

3. Step 3

   Read the math

   Walk regular tax vs tentative minimum tax. The exposure number is the planning-grade gap a qualified tax advisor will validate.

4. Step 4

   Test breakeven

   The breakeven figure is a planning-grade share count below which AMT exposure stays at $0 under the same assumption set.

5. Step 5

   Hand off

   Take the assumption sheet + memo to a qualified tax advisor. The model is the conversation starter, not the filing decision.

Planning-grade breakeven assumes proportional scale-down across grants. Above this share count the tentative minimum tax exceeds the regular-tax estimate.

# AMT scenario — planning memo

Educational planning model. Not legal, tax, accounting, or financial advice. State tax is not modeled. AMT credit carryforward is not modeled. The employee needs a qualified tax advisor for any actual filing decision. The output below is a starting point for the conversation between the equity holder, TR, and the tax advisor.

## 1. Inputs and assumptions
- Filing status: Married filing jointly
- AMT exemption: $140,200
- Exemption phaseout: starts at AMTI $1,000,000, 25.0¢ reduction per $1 above
- AMT brackets: 26.0% up to AMTI-after-exemption $244,500, then 28.0%
- Effective regular tax rate (planning slider): 27.0%
- Ordinary income estimate (excludes ISO bargain): $450,000
- FMV as-of: 2026-04-01
- Holding period note: Held > 1 year from exercise AND > 2 years from grant for long-term ISO qualifying disposition.
- State tax note: State tax not modeled. Confirm with a qualified tax advisor.

## 2. Per-grant bargain element
- **G-1001** — proposed 8,000 shares · strike $5 · FMV $50 · bargain/share $45 · bargain $360,000 · exercise cost $40,000
- **G-1002** — proposed 3,000 shares · strike $12 · FMV $50 · bargain/share $38 · bargain $114,000 · exercise cost $36,000
- **G-1003** — proposed 500 shares · strike $40 · FMV $50 · bargain/share $10 · bargain $5,000 · exercise cost $20,000

## 3. Totals at the proposed exercise
- Proposed exercise shares: 11,500
- Total exercise cost (cash to the company): $96,000
- Total bargain element (added to AMTI): $479,000

## 4. Regular vs tentative minimum tax (planning)
- AMTI proxy = ordinary income + bargain element: $929,000
- AMT exemption after phaseout: $140,200
- AMTI after exemption: $788,800
- Tentative minimum tax (TMT): $215,974
- Regular tax estimate (planning slider × ordinary income): $121,500
- **AMT exposure = max(0, TMT − regular): $94,474**

## 5. Breakeven and liquidity (planning-grade)
- Planning breakeven shares (proportional scale across grants): 3,399
- Planning-grade breakeven assumes proportional scale-down across grants. Above this share count the tentative minimum tax exceeds the regular-tax estimate.
- Cash needed to cover the AMT exposure (informational): $94,474

## Recommended next steps
1. **Qualified tax advisor.** This is a planning model, not a filing recommendation. Bring the assumption set + the per-grant bargain table to the advisor.
2. **State tax.** Model the state surcharge against the full bargain element for the year of exercise.
3. **Liquidity plan.** If the AMT exposure exceeds available cash, walk options (sell-to-cover the next vest, exercise less, exercise across two tax years).
4. **Holding period.** Confirm the long-term ISO qualifying-disposition criteria (held > 1 year from exercise AND > 2 years from grant) and the disqualifying-disposition implications.
5. **Document the assumption set.** Save the assumption sheet alongside the memo so the advisor can stress-test the same scenario against their own projection.

## Disclaimer
This is a deterministic planning model. AMT credit carryforward, capital gains tax on a subsequent sale, state and local tax, AMT preference items beyond the ISO bargain element, and any individual deduction or credit are out of scope. The employee needs a qualified tax advisor.