ESPP Form 3922 box 8

[cthury]

I sold ESPP in 2022 and after I enter in all the data that Turbo Tax asks, I go to forms and look at the Form 3922 that Turbo Tax completed.  I compare it to the actual Form 3922 I received and there is a different value in Box 8. I manually changed the Box 8 value, and my tax changed.  Since Turbo Tax doesn't ask for the value in Box 8, I'm not sure what to do.  Can you help?

[GeorgeM777]

The instructions for Form 3922 provide that there will be a value in Box 8 on Form 3922 if the exercise price was not fixed or determinable on the date the option was granted.  

For purposes of determining your gain or loss,  the amounts that need to be entered into TurboTax are those amounts in boxes 1 through 6.  The information in boxes 1 through 6 represents what actually took place with regard to your ESPP shares.  In other words, you are entering your transaction information.  The value in box 8 represents the exercise price per share price as if the the option was exercised on the date the option was granted.   TurboTax does not ask for box 8 information because it has no relevance regarding your gain/loss on these transactions. 

@cthury 

[cthury]

Thank you for your quick response.  But if Box 8 has no relevance in my gain/loss, why does my tax amount owed change when I manually change that number?

[GeorgeM777]

The tax due/refund changes because when you enter the amount from box 8, you are likely changing your basis in the ESPP shares.  On your Form 3922, is there difference between the exercise price in box 8 and the exercise price in box 5?  There probably is, but if not, you should not see a change in the tax due/refund amount.   

@cthury 

[cthury]

There is a difference between those 2 boxes.  When I enter in the box 8 manually, I owe MORE taxes.  

So I'm going to believe TT and not mess with that manual entry.

I really appreciate your helping me on this topic.

[GeorgeM777]

Yes, the tax due amount increases because the box 8 amount is lower than your actual exercise price.  You are handling this correctly.  Use the box 5 amount, which represents your actual exercise price paid per share.  

@cthury