If you received Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan (ESPP) Under Section 423(c), you generally do not enter this form on your tax return.
Form 3922 is provided for informational purposes only. It contains important details about shares purchased through an Employee Stock Purchase Plan and should be kept with your tax records for future reference.
What Is Form 3922 Used For?
Form 3922 reports information about stock you acquired through an Employee Stock Purchase Plan (ESPP), including:
- The offering date
- The purchase date
- The purchase price
- The fair market value of the stock
- The number of shares transferred
You'll need this information later to determine the correct gain, loss, and potential compensation income when the stock is sold, assigned, or otherwise transferred.
Do I Enter Form 3922 on My Tax Return?
No. Form 3922 is not entered directly into your tax return.
Receiving Form 3922 does not, by itself, create a taxable event. Instead, the form serves as a record of your stock purchase and helps you accurately calculate the tax consequences when you eventually dispose of the shares.
What Happens When I Sell the Stock?
When you sell shares acquired through an ESPP, you'll typically receive Form 1099-B from your broker reporting the sale.
At that time, you'll report the stock sale on your tax return and may need information from Form 3922 to:
- Determine the correct cost basis.
- Calculate your gain or loss.
- Identify any compensation income associated with the sale.
- Ensure the transaction is reported accurately.
Because brokerage firms don't always report the adjusted basis used for ESPP shares, keeping Form 3922 can help prevent reporting errors and reduce the chance of paying tax on the same income twice.
What Should I Do With Form 3922?
Keep Form 3922 with your permanent tax records until after you've sold all shares covered by the form and reported the sale on your return.
You'll likely need the information from Form 3922 when preparing the tax return for the year the stock is sold.
Where Can I Find IRS Form 3922?
Reviewing the form can help you understand the information your employer reports and what you'll need when the stock is eventually sold.
Before You File
If you only received Form 3922 and did not sell the stock during the tax year, there is generally nothing to enter on your federal return related to the form. Simply retain it for future use.
If you sold ESPP shares during the year, report the sale using the information from your Form 1099-B and use Form 3922 to verify the basis and calculate any required adjustments.