U.S. · Tax forms
Form 6251 line 2i: incentive stock options.
The AMT adjustment for exercising ISOs, with the IRS example.
Line 2i is the exercise of incentive stock options (ISOs). For regular tax, no income is recognized at exercise, but for the AMT you generally include the excess of the stock’s fair market value when your rights first become transferable or are no longer subject to a substantial risk of forfeiture over the amount you paid. If you exercise and sell in the same year, regular tax and AMT treatment are the same and no adjustment is required.
Look up an ISO rule
Result
ISO rules for line 2i
| Item | Meaning | Where it goes (per the IRS instructions) |
|---|---|---|
| 2i | Adjustment amount | Excess of the stock’s fair market value (without regard to any lapse restriction) when rights first become transferable or no longer at substantial risk of forfeiture, over the amount you paid, including any amount paid for the ISO. |
| Election | Early inclusion | Even if rights are not transferable and are subject to forfeiture risk, you may elect to include the excess of FMV over exercise price when the stock is transferred to you. Make the election by the 30th day after the transfer. |
| Same year | Exercise and sale in one year | Regular tax and AMT treatment are the same and no adjustment is required. |
| AMT basis | Basis increase | Increase your AMT basis in stock acquired through the exercise by the adjustment. Keep records for both systems; see line 2k. |
| 3921 | Form 3921 helper | Box 3 is the exercise price per share, box 4 the FMV on the exercise date, box 5 the number of shares. |
The IRS example
The instructions give this one. You exercised an ISO to acquire 100 shares in 2025, your rights were transferable on the exercise date and not subject to a substantial risk of forfeiture, and you paid nothing for the ISO. Form 3921 shows $10 in box 3, $25 in box 4 and 100 shares in box 5. FMV of all shares is $25 times 100, or $2,500. Amount paid is $10 times 100, or $1,000. The adjustment is $1,500, entered on Form 6251 line 2i.
Why it matters later
Because AMT basis increases by the adjustment, the gain or loss when you sell the stock differs between regular tax and the AMT. Use line 2k for that later adjustment, and keep both sets of records.
Check the AMT exemption
This page covers the adjustment only. Whether it produces any AMT depends on the rest of the form, including the exemption; see the AMT exemption calculator.
More IRS form line pages
Other pages in this set: Form 8949 Boxes A-L, Form 5329 Part III, Form 4562 Line 14, Form 4562 Line 12, Form 4562 Convention Codes, Form 5329 Line 52, Form 4562 Line 19, Form 4562 Line 42, Form 6251 Line 2c, Form 6251 Line 2l. The 1099-R box 7 lookup and W-2 box 12 lookup cover the same kind of question for those forms.
Sources
- Instructions for Form 6251 (2025): the sections for the lines and boxes on this page. Read November 2, 2026.
IRS page last reviewed April 30, 2026. Tax year 2025 edition. Line numbers, dollar limits and dates are those printed in the 2025 instructions and can change. Names in worked examples are made up.
Frequently asked questions
What is line 2i on Form 6251?
The AMT adjustment for the exercise of incentive stock options, generally the excess of the stock’s fair market value over what you paid when your rights become transferable or no longer subject to a substantial risk of forfeiture.
Do I report an ISO exercise on Form 6251 if I sell the stock the same year?
No adjustment is required. The instructions say regular tax and AMT treatment are the same if you exercise and dispose of the stock in the same year.
Which Form 3921 boxes do I use?
Box 3 (exercise price per share), box 4 (FMV per share on the exercise date) and box 5 (number of shares), as in the IRS example.
What is the 30 day election?
If your stock is not transferable and is subject to forfeiture risk, you may elect to include the excess of FMV over exercise price on transfer, by the 30th day after the transfer.
Does the adjustment change my AMT basis?
Yes. Increase your AMT basis in the stock by the amount of the adjustment and keep records for both the AMT and regular tax.
Not tax advice
This page summarizes IRS instructions, mostly written for the people who prepare the form, and is not tax, legal or financial advice. The payer, a CPA or an enrolled agent can confirm what a box or code means for your return. Everything runs in your browser; nothing you enter is sent anywhere.