Rounded up share price on tax form

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Topic Author
deanmoriarty
Posts: 355
Joined: Tue Jan 28, 2014 1:19 am

Rounded up share price on tax form

Post by deanmoriarty »

Hello,

In 2019, I exercised a significant amount of employer ISO. My exercise price was $0.166, and I exercised 200,000 shares, writing a fat check to my company for $33,200 (ugh!).

Since I held on to the exercised shares for the entire duration of 2019, I am hit with AMT. Considering the fair market value of the shares on the day of exercise was $1.50, I am expected to pay AMT on the bargain element ($1.50 - $0.166) * 200,000 = $266,800. In fact, I have made properly IRS and state quarterly payments throughout 2019.

Last week, I received the official form 3921, that I should use to report my transaction for AMT purposes on my tax return. However, in the form the exercise price of the shares has been rounded up to $0.17. This results in a bargain element of ($1.50 - $0.17) * 200,000 = $266,000, lower than the one I was expecting.

My question is: what cost basis do I use when I file 2019 taxes for AMT purposes? Certainly when/if I'll sell the shares I will use $0.166 as cost basis for regular capital gain/loss calculation, but for this year's AMT, could I use the rounded version reported to me on form 3921, or should I use the more accurate number based on the actual transaction that occurred?

Thanks!

PS: Please limit your reply to tax advice. I know what I did is very irresponsible, but I am otherwise a very good boglehead and have actually been able to liquidate this employer stock in the past on the private market a couple times, for a pretty good profit :sharebeer
Topic Author
deanmoriarty
Posts: 355
Joined: Tue Jan 28, 2014 1:19 am

Re: Rounded up share price on tax form

Post by deanmoriarty »

Kindly bumping this up one (only) time for visibility.

Thanks
bryanm
Posts: 333
Joined: Mon Aug 13, 2018 3:48 pm

Re: Rounded up share price on tax form

Post by bryanm »

Might want to send @SpiritRider a PM?
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