Form 3922: Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)
Report the first transfer of stock acquired through an Employee Stock Purchase Plan (ESPP).
Filing Deadline
January 31 (to employee) / February 28 (paper) or March 31 (e-file) to IRS
Purpose
Track ESPP stock transfers for proper tax reporting
First Transfer Only
Only report the first transfer of legal title
Overview
Form 3922 is issued by corporations when an employee first transfers stock acquired through an Employee Stock Purchase Plan (ESPP) under Section 423(c). The form provides information needed for the employee to calculate the tax treatment of the transfer.
ESPPs allow employees to purchase company stock at a discount (up to 15%). Tax treatment depends on whether holding period requirements are met and the size of the discount.
Who Must File
Required Filers
- •Corporations with Section 423(c) employee stock purchase plans
- •Must file for first transfer of legal title of ESPP shares
- •Required when employee transfers to another person
- •Includes transfers by sale, gift, or other disposition
Exceptions & Notes
- ✕Not required if shares never transferred during employee's lifetime
- ✕Special rules apply for transfers at death
Form Structure & Instructions
Here's what information is required in each section:
Option Grant Information
Details about the ESPP offering
Transfer and Share Details
Information about the stock transfer
Important Filing Notes
Qualifying vs. Disqualifying Disposition
Qualifying disposition requires holding shares at least 2 years from grant date (Box 1) and 1 year from purchase date (Box 2). If met, ordinary income is limited to lesser of (1) discount at grant or (2) actual gain.
Disqualifying Disposition Tax Treatment
Selling before meeting holding periods triggers ordinary income equal to discount (Box 5 minus Box 3), reported on W-2. Remaining gain/loss is capital. Different from ISO treatment.
Lookback Discount ESPPs
Many ESPPs allow purchase at 85% of lower of price at beginning or end of offering period. The discount (15%) can be calculated on Box 4 or Box 5, whichever is lower.
Broker Reporting May Be Incorrect
Form 1099-B from broker often doesn't properly account for W-2 compensation or holding period rules. Use Form 3922 to calculate correct basis and gain/loss.
ESPP Transfer Reporting Expertise
Navigate the complexity of Form 3922 reporting for employee stock purchase plans. We ensure accurate filing for all ESPP transfers.
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