Hank Allen realized a $40,000 gain upon exercising stock options in 2016, and this created an alternative minimum tax for the year. In 2017, the exercised stock became worthless, and Hank's loss from worthlessness is $15,000, which was his exercise price in the stock. Hank has no other capital transactions during 2017. Since the AMT credit will not help Hank in the current year, he believes that he should be able to report the $15,000 loss for AMT purposes, even though his regular tax loss would be limited to $3,000 since this stock is a personal investment. Is Hank correct?

Yes

No  

Answer rating: 100% (QA)

No The loss from the worthlessness of the s... View the full answer