Updated October 18, 2026. Quick answer: Line 2i is the AMT adjustment for exercising incentive stock options. For the regular tax, no income is recognized at exercise, but for the AMT you generally include the excess of the stock’s fair market value over what you paid. Form 3921 can help you figure it.
What line 2i asks for
The caption is “Exercise of incentive stock options (excess of AMT income over regular tax income)”. The instructions explain the difference: “For the regular tax, no income is recognized when an incentive stock option (ISO), as defined in section 422(b), is exercised.” “However, this rule doesn’t apply for the AMT.”
What you enter
The instructions say “Instead, you must generally include on line 2i the excess, if any, of:” The first amount is “The fair market value (FMV) of the stock acquired through exercise of the option (determined without regard to any lapse restriction) when your rights in the acquired stock first become transferable or when these rights are no longer subject to a substantial risk of forfeiture; over” The second is “The amount you paid for the stock, including any amount you paid for the ISO used to acquire the stock.”
There is also an election: “Even if your rights in the stock aren’t transferable and are subject to a substantial risk of forfeiture, you may elect to include in AMT income the excess of the stock’s FMV (determined without regard to any lapse restriction) over the exercise price upon the transfer to you of the stock acquired through exercise of the option.” On timing: “You must make the election by the 30th day after the date of the transfer.”
Same-year sales and your AMT basis
The instructions say “If you acquired stock by exercising an ISO and you disposed of that stock in the same year, the tax treatment under the regular tax and the AMT is the same, and no adjustment is required.” Otherwise, “Increase your AMT basis in any stock acquired through the exercise of an ISO by the amount of the adjustment.” That higher basis matters later, and the instructions point to the next page: “See the instructions for line 2k.” The sale side is on the line 2k page, and the tax on a sale before the holding periods are met is discussed at ISO disqualifying disposition tax.
Where the number comes from
The numbers come from your exercise records. The instructions say “If you received a Form 3921, it may help you figure your adjustment.” They then give an example. “To figure your adjustment, multiply the amount in box 4, $25, by the 100 shares in box 5.” “The result is $2,500, the FMV of all the shares.” “Then multiply the amount in box 3, $10, by the 100 shares in box 5.” “The result is $1,000, the amount you paid for all the shares.” The example ends: “Your adjustment is $1,500” and “Enter it on Form 6251, line 2i.”
To try your own numbers, the ISO AMT bargain element calculator works the same subtraction, and the NSO versus ISO page compares the two option types.
Where it goes next
Line 2i is added into line 4, which says “Combine lines 1b through 3.” Part I continues on the line 2k page and then line 2l. Credit for AMT paid in earlier years is covered at AMT credit recovery.
Edition and line numbers
This page reads the 2025 Form 6251 and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The Form 6251 header says “Attach to Form 1040, 1040-SR, or 1040-NR.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Assuming no AMT entry because the regular tax shows none. The instructions say “However, this rule doesn’t apply for the AMT.”
- Missing the election deadline. The instructions say “You must make the election by the 30th day after the date of the transfer.”
- Forgetting to track basis. The instructions say “Keep adequate records for both the AMT and regular tax so that you can figure your adjustment.”
Related: Form 6251, ISO disqualifying disposition tax, ISO AMT bargain element calculator, NSO versus ISO, and AMT credit recovery.
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- Instructions for Form 6251, Alternative Minimum Tax, Individuals (2025): https://www.irs.gov/pub/irs-pdf/i6251.pdf
- Form 6251, Alternative Minimum Tax, Individuals (2025): https://www.irs.gov/pub/irs-pdf/f6251.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.