check

Quiz 8 - Advanced Tax - ISOs and the Alternative Minimum Tax (AMT) (Email 8)

Click the start button below to start your 4 question quiz below. Good luck!

Click the button below to start.

Start

Question 1 of 4

Simple Homework: Look at your grant agreement again. Do you have ISOs?

 

If so, be aware that exercising them might trigger AMT, and this is a topic you'll want to discuss with a financial advisor or tax professional before taking action.

A

Yes

B

No

C

I can't find it

Question 2 of 4

For ISOs, the 'spread' at exercise is not taxed for regular income tax, but it is considered income for which other tax system?

A

Alternative Minimum Tax (AMT)

B

Value Added Tax (VAT)

C

Ordinary Income Tax

D

Capital Gains Tax

Question 3 of 4

Why is it important to plan for AMT before exercising a large number of ISOs?

A

To ensure you have the funds to pay a potentially large AMT bill.

B

To guarantee that you receive a full AMT credit.

C

To avoid having to pay any taxes at all on your options.

D

To get a tax deduction for your ISOs.

Question 4 of 4

Which of these statements correctly compares the tax treatment of NSOs and ISOs at exercise?

A

Both NSOs and ISOs are taxed as ordinary income on the 'spread' at exercise.

B

Neither NSOs nor ISOs are ever taxed on the 'spread.'

C

NSOs are taxed on the 'spread' at exercise, while ISOs are tax-deferred for regular tax purposes (but may trigger AMT).

D

NSOs are tax-deferred at exercise, while ISOs are taxed as ordinary income.

Confirm and Submit