What do I do with my Form 3921?
In many cases, Form 3921 doesn't need to be reported. Form 3921 reports the exercise of an incentive stock option (ISO).
Stock purchased with ISOs may qualify for preferential tax treatment if certain holding requirements are met. In order to have a qualifying disposition when you sell your stock, you'll need to hold the stock for:
An exception applies in the year of exercise if you are subject to the Alternative Minimum Tax (AMT). If you are subject to AMT, you need to add back the difference between the fair market value of stock on the exercise date over the grant price while determining your AMT income. Because the AMT only applies to taxpayers with very high incomes and unique situations, most people don't need to make this adjustment. You can walk through Form 6251 to determine if this applies to you.
You can use the Form 3921 information to determine this.
Note that if you owe AMT due to exercising your ISOs, your situation will not be supported in our software for the year of exercise. Nor do we support any AMT adjustments needed in the year the ISO is sold.
Stock purchased with ISOs may qualify for preferential tax treatment if certain holding requirements are met. In order to have a qualifying disposition when you sell your stock, you'll need to hold the stock for:
- At least two years after the grant date AND
- At least one year after the exercise date
An exception applies in the year of exercise if you are subject to the Alternative Minimum Tax (AMT). If you are subject to AMT, you need to add back the difference between the fair market value of stock on the exercise date over the grant price while determining your AMT income. Because the AMT only applies to taxpayers with very high incomes and unique situations, most people don't need to make this adjustment. You can walk through Form 6251 to determine if this applies to you.
You can use the Form 3921 information to determine this.
Note that if you owe AMT due to exercising your ISOs, your situation will not be supported in our software for the year of exercise. Nor do we support any AMT adjustments needed in the year the ISO is sold.
