That's because if you don't sell ISO stock by the end of the calendar year in which you exercised your options, the paper profit at the time of exercise is taxed in the AMT as ordinary income at rates of around 28%, regardless of whether you ever realize that paper profit.

FORBES: Poof! A Tax Credit

In a December exercise, at the end of the tax year, the additional tax will be due soon afterward, as you must file your tax return for that year before the middle of April.

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