ISO AMT Exposure Modeler

The ISO bargain element is an AMT preference: under IRC §56(b)(3) the spread is included in AMTI for the exercise year. AMTI = ordinary income + ISO spread + other adjustments. The exemption is reduced by 50% of AMTI above the phase-out threshold (IRC §55(d)(4)(A)(ii) overrides §55(d)(2) for tax years beginning after Dec. 31, 2025, and Rev. Proc. 2025-32 §4.10's phaseout table carries the same rate); the tentative minimum tax is 26% of the first $244,500 of the AMT base plus 28% above (IRC §55(b)(1)(A), 2026 threshold per Rev. Proc. 2025-32 §4.10); the AMT is the excess of TMT over regular tax (IRC §55(a)) and is carried as a minimum tax credit (IRC §53). The regular tax is computed on taxable income, the ordinary-income input minus the 2026 standard deduction ($16,100 single / $32,200 joint per Rev. Proc. 2025-32 §4.14(1), IRC §63(b)(1)), using the 2026 §1 rate tables; AMTI deliberately takes no deduction (IRC §56(b)(1)(D)). This node assumes the standard deduction: itemized deductions and the other §63(b) deductions are not modelled. Sale-year regular tax, state AMT, the §1202/QSBS interaction and the IRC §422(a) disposition-holding-period rules sit outside this model; treat the output as a planning estimate and prepare the actual return with a tax professional.