Marcus Lee Donnelly , CPA, MSA

Marcus spent eight years inside a national firm’s stock-based compensation practice before moving to a smaller partnership where he could spend more time on individual planning. His clients are overwhelmingly early-to-mid employees at venture-backed companies holding incentive stock options with strike prices set when the 409A was a tenth of the current fair market value. A typical engagement starts with an employee who has 40,000 vested ISOs, a $2 strike, and a $32 current 409A, wondering whether to exercise before year-end.

The calculation he runs every January is the AMT crossover. On that 40k ISO position, the bargain element is $1.2M of AMT income. After the 2024 exemption and phaseout, the client is looking at roughly $280k of AMT liability on a paper gain they cannot sell to cover. He walks clients through partial exercises sized to stay under the AMT tipping point, usually exercising just enough ISOs each year to absorb prior-year AMT credit and push income close to the phaseout threshold without breaching it. He also sees a lot of clients who exercised in a high-valuation year, watched the 409A drop, and now need a disqualifying-disposition plan to recover the AMT credit.

He reviews content on ISO exercise timing, AMT projections, and Form 6251.