January 31, 2014 Deadline for Reporting Incentive Stock Option Exercises and Employee Stock Purchase Plan Transfers that Occurred in 2013

by Snell & Wilmer
Contact

As reported in Part 1 of our 2013 End of Year Plan Sponsor “To Do” Lists, Section 6039 of the Internal Revenue Code (the Code) requires employers to provide an information statement to each employee or former employee regarding: (1) the transfer of stock pursuant to the exercise of an Incentive Stock Option (ISO); and (2) the transfer by the employee or former employee of stock purchased at a discount under an Employee Stock Purchase Plan (ESPP). For ISO grants and ESPP transfers that occurred in 2013, the required information statements must be provided to employees and former employees no later than January 31, 2014. In addition, employers must file a corresponding return with the Internal Revenue Service (IRS) by February 28, 2014 for paper filings and March 31, 2014 for electronic filings.

ISO Exercises that Occurred in 2013

The IRS requires that IRS Form 3921 be used to satisfy both the employee information statement and IRS return requirement for reporting ISO exercises. IRS Form 3921 requires disclosure of the following information:

  • Name, address and employer identification number of the corporation transferring the stock upon the exercise of the ISO.
  • Name, address and social security number (or tax identification number) of the person to whom the shares were transferred pursuant to the exercise of the ISO.
  • The date the ISO was granted.
  • The exercise price per share.
  • The date in 2013 when the ISO was exercised.
  • The fair market value of a share of stock on the date the ISO was exercised.
  • The number of shares of stock transferred pursuant to the exercise of the ISO.

The deadline for providing employees with a copy of Form 3921 for 2013 ISO transactions is January 31, 2014. Employers must file a corresponding Form 3921 with the IRS by February 28, 2014 for paper filings and March 31, 2014 for electronic filings.

Discounted ESPP Share Transfers that Occurred in 2013

The IRS requires that IRS Form 3922 be used to satisfy both the employee information statement and IRS return requirement for reporting the first transfer of legal title of discounted shares acquired pursuant to an ESPP. IRS Form 3922 requires disclosure of the following information:

  • Name, address and employer identification number of the corporation whose stock was transferred.
  • Name, address and social security number (or tax identification number) of the transferor (the person who originally acquired the shares pursuant to the ESPP).
  • The date of grant of the purchase right pursuant to the ESPP (typically the offering date for the relevant ESPP offering period).
  • The fair market value of the stock on the date of grant.
  • The date when the shares were purchased.
  • The fair market value of a share of stock on the date the shares were purchased.
  • The purchase price per share at which the shares were actually purchased under the ESPP.
  • The price per share determined as if the shares were purchased on the date of grant (only required if the purchase price per share is not fixed or determinable on the date of grant).
  • The date in 2013 when legal title to the shares was first transferred.
  • The number of shares to which legal title was transferred.  

The deadline for providing employees with a copy of Form 3922 for 2013 ESPP share transfers is January 31, 2014. Employers must file a corresponding Form 3922 with the IRS by February 28, 2014 for paper filings and March 31, 2014 for electronic filings.

The failure to timely file Form 3921 and/or Form 3922, as applicable, can subject an employer to the penalties described in Section 6721 and 6722 of the Code.

Circular 230 Disclaimer: To ensure compliance with Treasury Regulations governing written tax advice, please be advised that any tax advice included in this communication, including any attachments, is not intended, and cannot be used, for the purpose of: (i) avoiding any federal tax penalty; or (ii) promoting, marketing, or recommending any transaction or matter to another person.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Snell & Wilmer | Attorney Advertising

Written by:

Snell & Wilmer
Contact
more
less

Snell & Wilmer on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!