Form 3921: How to Report Transfer of Incentive Stock Options in 2018 Tax Season
This post was updated in April 2018
IRS Form 3921: Exercise of an Incentive Stock Option Under Section 422(b)
One of the significant parts of annual taxes is selling, transfer or acquiring stock options. There are different forms for informing IRS about any of these transactions. In today’s blogpost we are going to prep ourselves for reporting a transfer of incentive stock option. This means that the transferor has to fill out the same table with the number of shares transferred, exercise price per share and fair market value per share on exercise date for four parties. He has to send a copy to the corporation whose stock is being transferred, one copy for employee who exercises the option, another copy to the IRS and keep the last copy for his own records. You can find all of them in the Form 3921.
Who has to file IRS Form 3921?
Form 3921 is the US Internal Revenue Service form, officially called the Exercise of an Incentive Stock Option Under Section 422(b). The form is designed to be used by any corporation that transfers to any person a share of stock pursuant to the transferee’s exercise of an incentive stock option as described in section 422(b) and is applicable to the calendar year during which the transfer was made.
What is the purpose of Form 3921?
The IRS 3921 form serves as an information statement furnishing employees with the details of incentive stock options that were exercised during the year.
Is Form 3921 accompanied by any other forms?
The submission of the completed Form 3921 to the employee does not necessitate attaching any accompanying forms or documents. In general there are several copies of the same return to send to the IRS, the employee exercising an option and the corporation whose stock is being transferred.
When is the Exercise of an Incentive Stock Option form due?
The employer should provide the exercising employees with the 3921 Form by January 31. This due date works for Copies B and C received by the corporation and the employee. The IRS in turn should receive its own copy (Copy A of this form) a month later, by February 28th, and if you file it electronically it’s not due until April 2, 2018.
How do I fill out the 3921 Form?
To be properly completed, the form must include the following details:
- Information about the Transferor (name and address)
- Transferor’s federal identification number
- Information about the Employee (name, address, account number)
- Dates of options granting and exercising
- Exercise price per share
- Number of transferred shares
- Fair market value of a share
- Data about the corporation whose stock is transferred (if other than the Transferor)
What should be done with all four copies of the 3921 Form?
There are detailed instructions about where to submit the four copies (A, B, C and D) on each corresponding page of the document. You must have the correct addresses of the employees and corporation’s business address for sending copies B and C.
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