@TomYoung wrote:
I assume you made some sort of entry for AMT purposes even though there was no "spread" between what you paid and FMV? That is, the actual adjustment was $0? (The entry should have really been made in the year you exercised as it's not selling all the stock acquired via an ISO in the year of acquisitions that triggers AMT.) There's no other way to "file" a Form 3921 that I'm aware of.
That is correct.
@TomYoung wrote:This is strictly a seat of the pants answer without any sort of cite, but I don't see any problem at all, you simply report the sale of the ADS and indicate the purchase date, back before the IPO. The 4:1 ratio of "stock" to ADS seems to be nothing more than a "stock split", from your perspective. Given the time gap it sure is a long term capital gain. I would guess the IRS wouldn't even try to "associate" the sale with the Form 3921.
If the IRS ever asks about the sale, I'd bet money and give you odds that they won't, you explain things to them.
Except that this isn't exactly a stock split, because I'm exchanging one type of share for another. Does my organization need to file form 8937?
https://www.irs.gov/forms-pubs/about-form-8937
File Form 8937 if you are an issuer of a specified security that takes an organizational action that affects the basis of that security. A specified security is:
Any share of stock in an entity organized as, or treated for federal tax purposes as, a corporation;
Any interest treated as stock, including, for example, an American Depositary Receipt
Does an IPO event of an ADS share, with a defined conversion ratio count as an "organizational action that affects the basis of that security"?
