The spread between the fair market value of the shares on the date of exercise and the amount paid for the shares is a tax preference item for purposes of the AMT in the calendar year in which ISOs are exercised, but only when the rights acquired become transferable or when they are no longer subject to a substantial risk of forfeiture (whether either condition applies in your case should be determined by asking the issuer). 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 fair market value over the exercise price upon the transfer to you of the shares acquired through exercise of the option. Taking this spread into account may mean your AMT is higher than your regular tax; you pay the higher amount. However, looking ahead, you may be able to recoup some of that tax through a minimum tax credit in the future.
Debt on which a person is not personally liable. In case of nonpayment, the creditor must foreclose on property securing the debt. At-risk rules generally bar losses where there is nonrecourse financing, but an exception applies to certain nonrecourse financing for real estate.