AMT Triggers (Common)
taxAlso known as: alternative minimum tax triggers, AMT preference items
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
After TCJA dramatically raised AMT exemptions and OBBBA preserved them, AMT now hits roughly 200,000 taxpayers per year (down from 5+ million pre-TCJA). The biggest remaining trigger is exercising Incentive Stock Options without a same-year sale — the bargain element (FMV at exercise minus strike) is an AMT preference item. Long-term capital gains keep their preferential rates under AMT but increase the AMT income calculation, sometimes triggering AMT for retirees harvesting big gains. The AMT credit (Form 8801) lets you recover AMT paid on timing-difference items in future years when regular tax exceeds tentative AMT.
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