$80K AMT Bill on a $0 Stock: How ISO Exercise Goes Wrong
Marcus exercised 12,000 ISOs at $7 strike when FMV was $42. The 2022 IPO peaked, then crashed 80% by tax day. He owed $80K of AMT on a position now worth less than the strike. Here's the exercise math, the exit options, and what the calculator should have shown before he wired.