Incorrect form 3921

Forum|Forum|3 years ago
January 30, 2023
1 reply
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I received a form 3921 from my company for exercising some stock options that had vested.

However I noticed that not all the exercised options were listed on the list of transactions on the form 3921.

Now, all the exercised ISO's (those listed on 3921 and not listed on 3921) were sold as soon as they were exercised. I'm expecting a 1099-B from the brokerage company to reflect that (the online transaction report and cost basis report is showing it correctly).

Also on one of the listed transaction the FMV (Box 4) is less than the Exercise price (Box 3). This is also incorrect, the execution price of the ISO was greater than the exercise price (albeit by a few cents) which is showing correctly in the brokerage transaction report. What's the implication of this? Could it be that the FMV is calculated at the end of the day where as the transaction was executed at a slightly higher price than the reported FMV during a mid day transaction?

My understanding from reading the community questions is that form 3921 is informational only, what matters is form 1099-B to ensure that all the ISO exercise sales and costs basis are reflected correctly there.

Is that true? Do I need to bother trying to get my ex-employer to fix the 3921?

Not A Product Question

G

GeorgeM777

Your company could use the closing price on the date you exercised your ISOs, or maybe the opening price, or maybe an average price. You could check your company's quarterly reports and review the sections that relate to employee compensation. ISO pricing may be discussed in such reports. You could also check with your plan administrator.

While your Form 3921 may be inaccurate, your 1099-B may also not reflect all relevant information in that it might be missing your cost basis as the brokerage firm may not have that information. The brokerage firm will have the gross proceeds from any sale and will also know the amount of commissions, if any, from the sale. Thus, you might need to maintain several different records to justify the amounts you report on your return.

If your ex-employer is willing to correct your Form 3921, go ahead and request an amended Form 3921. However, if you cannot get an amended Form 3921, use your 1099-B as a reference, but also your trade confirmations. Make any adjustments on Form 8949,

Sales and Other Dispositions of Capital Assets.

@InformedB

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