Form 3921

Form 3921

A form that a corporation files with the IRS upon an employee's exercise of a stock option. Form 3921 is used when the employee eventually sells the stock in order to calculate the capital gain or loss.
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Every corporation that in 2017 issued stock upon the exercise of an incentive stock option (meaning a stock option described in Section 422 of the Code) must, on or before January 31, 2018, furnish to the employee (or former employee) who exercised the option a written statement containing the information contained on Form 3921.
Form 3921 with respect to incentive stock option exercises or Form 3922 with respect to transfers of stock purchased under an employee stock purchase plan), or contained on a "substitute form" that meets the format and content requirements contained in Publication 1179.
Information returns with respect to incentive stock option exercises must be made on Form 3921 and information returns with respect to transfers of stock purchased under an employee stock purchase plan must be made on Form 3922.
There is also added support for Box 6 on Form 3921 to allow entry of parent and subsidiary company information.
The IRS has indicated that it is developing two new forms that taxpayers will use to fulfill the reporting requirements: Form 3921, Exercise of an Incentive Stock Option Under Section 422(b), and Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423 (c).
Form 3921, Exercise of an Incentive Stock Option Under Section 422(b) (this form was in development at the time of this writing);
Regulations under section 6039 require companies to file for each optionee and ESPP participant, to the extent applicable:An information return with the IRS on Form 3921 to report information relating to ISOs that were exercised in the prior year, and An information return with the IRS on Form 3922 to report shares purchased at a discount under an ESPP that were transferred to a third party in the prior year, including a transfer to a brokerage account or financial institution, which typically occurs immediately after the purchase of shares under an ESPP.
A company may satisfy the information statement requirement by providing optionees or ESPP participants with either a copy of the actual IRS Form 3921 or 3922 or, alternatively, a substitute form of statement that contains the same information as the form.
Form 3921 is a form that is used to report exercise of an incentive stock option under Section 422(b).
At the time it issued the final regulations, the IRS indicated that it was in the process of developing two new forms that taxpayers will use to fulfill the reporting requirements: Form 3921, Exercise of an Incentive Stock Option Under Section 422(b), and Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c).
For ISOs, the final regulations indicate that Form 3921 will require the following information: