OT: Tax Gurus...Stock Option Question, AMT section? Options

[nine14cats]

Tis the season to be taxed...... (IMG:http://www.914world.com/bbs2/html/emoticons/laugh.gif)

Question for the tax gurus:

Background
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I exercised a boat load of stock options last tax year (2004). Since it's a private company and not publicly traded, twice a year an independant auditing company comes in and sets the relative worth of the internal stock. In any case, part of this companies stock option plan is that the employee must have some weighted risk involved (no cashless transactions), in this case you must hold the stock for a minimum of 6 months to qualify your "risk".

So the scenario is that I purchased my shares at a given price in 2004 and I paid the estimated taxes on the stock's capital gains in 2004. Due to the 6 month waiting period the tax years 2004 and 2005 overlap, so in 2005 the actual sale of the stock and cash out occurred. Luckily, the estimated and actual sales price / tax paymets are very close.

Where is something like this addressed inside the tax forms? Since I already reported it as earned income in 2004 and paid the appropriate taxes, this is more of an adjustment. But I do have a brokers statement stating the actual gross payout on a 2005 tax year statement.

My first thought is that this may be handled under the AMT (Alternative Minimum Tax) section, but in reality, I haven't read through my tax books yet. Just being lazy as this is the last thing to do.

I was hoping someone went through something similar and can give me a pointer on where to read up on it in the tax code.

And yes, I also have a tax professional that I use from time to time, but I'm also one of those people that likes to try and understand where everything is going, even if I use my accountant.

Any tips appreciated!

Bill P.