Staggering the exercise of ISOs over several years can sometimes avoid triggering the Alternative Minimum Tax.

Staggering the exercise of ISOs over several years can sometimes avoid triggering the Alternative Minimum Tax or at least minimize the damage. The staggering idea can often be quite effective around year-end. For instance, a client could exercise some ISOs in December and some more early in the following year before significant additional appreciation occurs. The Alternative Minimum Tax can be avoided (or at least minimized) in both years.