A few years back, the Chicago Tribune reported that a poor taxpayer in Flossmoor, Illinois, got slapped with a $438,000 AMT bill after he exercised his incentive stock options.1

The Tribune reported that the exercise of the options caused a large “phantom” profit that triggered the big tax. The Tribune was wrong—the profit in the exercise of the stock options was real and measurable in cash. This taxpayer decided not to take the cash and pay the taxes, but instead ... Log in to view full article.