[{"data":1,"prerenderedAt":7},["ShallowReactive",2],{"faq-standard-10827":3},{"rec_id":4,"title":5,"text":6},"10827","What do I do with my Form 3921?","In many cases, \u003Ci>Form 3921\u003C/i> doesn't need to be reported. \u003Ci>Form 3921\u003C/i> reports the exercise of an \u003Ca href=\"/freefile2025/answers?faq=3533\">incentive stock option (ISO)\u003C/a>.\r\n\u003Cbr>\u003Cbr>\r\nStock purchased with ISOs may qualify for preferential tax treatment if certain holding requirements are met. \r\nIn order to have a qualifying disposition when you sell your stock, you'll need to hold the stock for:\r\n\u003Col>\r\n\u003Cli>\r\nAt least two years after the grant date AND\r\n\u003C/li>\r\n\u003Cli>\r\nAt least one year after the exercise date\r\n\u003C/li>\r\n\u003C/ol>\r\nIf you meet both holding requirements, generally no income is recognized when the option is granted or exercised. You will only recognize gain or loss when the stock is sold.\r\n\u003Cbr>\u003Cbr>\r\nAn 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 \u003Ca href=\"https://www.freetaxusa.com/taxes2025/formdownload?sid=17&form=f6251.pdf\" target=\"_blank\">Form 6251\u003Cspan class=\"append_pdf\"> \u003C/span>\u003C/a> to determine if this applies to you. \r\n\u003Cbr>\u003Cbr>\r\nYou can use the \u003Ci>Form 3921\u003C/i> information to determine this.\r\n\u003Cbr>\u003Cbr>\r\nNote 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.",1777391500331]