If you're in tech and exercised incentive stock options, you may have discovered that holding the shares can trigger Alternative Minimum Tax, even though you never sold anything and never saw a dollar of cash. Amy Walls breaks down why that phantom income creates a real tax bill, and why that bill isn't gone for good, it becomes a credit you can recover.

This episode walks through how the minimum tax credit tracked on Form 8801 actually gets recovered, why the 2026 changes to the AMT exemption phase-out under the One Big Beautiful Bill Act pull more tech professionals into this exact situation, and why some people recover their full credit while others end up with a portion permanently stranded.

You'll learn:

• Why exercising and holding ISOs can create a tax bill even with zero cash proceeds
• How the minimum tax credit on Form 8801 carries forward and what triggers recovery
• Why the 2026 AMT phase-out threshold and rate changes pull more tech professionals into AMT exposure
• Why the AMT rate you pay and the capital gains rate you recover against don't match, and what that means for your credit
• Why the size of an ISO exercise should be planned across multiple years, not decided in isolation

(00:00) Intro
(00:54) Why AMT Can Become a Future Tax Credit
(02:22) Why You Owe Tax Without Selling Shares
(02:30) Understanding the ISO Bargain Element
(05:11) Why AMT Matters More in 2026
(07:12) Priya’s $200,000 AMT Example
(09:47) Do You Always Recover the Full AMT Credit?
(10:53) Qualifying Dispositions and Capital Gains
(11:51) Understanding a Stranded AMT Credit
(12:31) How to Plan Before Exercising ISOs
(12:40) Why ISO Planning Should Be Multi-Year
(15:06) How to Contact Thimbleberry Financial

To get in touch with Amy and her team at Thimbleberry Financial, call 503-610-6510 or visit thimbleberryfinancial.com.

The ThimbleberryU Podcast is produced by JAG Podcast Productions - https://jagpodcastproductions.com/