You may own incentive stock options (ISOs) that permit you to buy company stock at a stated exercise price. You can exercise the options tax-free as well as qualifying for low-taxed capital gain when the stock is sold. But the bargain element of the incentive stock options (ISOs) (the difference between the option price and fair market value at the time it’s exercised) is considered a “tax preference” item for Alternative Minimum Tax purposes. Figure out with your tax adviser how many incentive stock options (ISOs) you can exercise this year without triggering Alternative Minimum Tax consequences.