How to read your Form 3921 / 3922
Every January, your company sends one of two information forms if you touched equity comp the prior year. They look intimidating; they're actually just receipts. Here's what each box means and what to do with it.
Form 3921 — ISO exercises
You get this if you exercised incentive stock options last year (even if you didn't sell).
| Box | What it is | What to do with it |
|---|---|---|
| 1 | Exercise price per share | Your strike price — the "from" in the bargain element. |
| 2 | FMV per share on exercise date | The "to" in the bargain element. Box 2 − Box 1 = spread per share. |
| 3 | Exercise date | Starts your capital-gains holding clock. |
| 4 | FMV per share on grant date | Mostly informational; rarely needed. |
| 5 | Number of shares exercised | Multiply by the spread for your total bargain element. |
The key math: (Box 2 − Box 1) × Box 5 = your AMT preference item. Feed it into the ISO/AMT estimator. If you sold the shares the same year in a disqualifying disposition, the spread shows up on your W-2 instead — don't count it twice.
Form 3922 — ESPP purchases
You get this if you purchased shares through your ESPP last year.
| Box | What it is | What to do with it |
|---|---|---|
| 3 | FMV per share on grant (offering) date | Documents the offering-date FMV for the qualifying-disposition test. |
| 4 | FMV per share on exercise (purchase) date | The "full price" — the discount is Box 4 − what you paid. |
| 5 | Actual price paid per share | Your discounted purchase price. |
| 6 | Exercise (purchase) date | Starts the 1-year purchase-date holding clock. |
| 8 | Number of shares purchased | Your share count for gain math. |
The key math: (Box 4 − Box 5) × Box 8 = the discount — the amount that will be ordinary income when you sell, and the amount you must add back to your 1099-B basis. See ESPP qualifying vs. disqualifying and run the ESPP calculator.
Common mistakes
- Ignoring the 3921 because "no tax was due." No regular tax was due — but the bargain element belongs on Form 6251 for AMT. Skipping it is how AMT surprises happen.
- Using 1099-B basis for ESPP sales without adjusting. The 1099-B shows what you paid, not what you paid plus the already-taxed discount. See the basis trap.
- Losing the forms. You'll need the purchase-date FMV years later when you sell. Save every 3921/3922 with your tax records permanently.