I sold ESPP stock and got a form 3922 where do I put it on my return?

[joanne0130]

I received both 1099B and 3922 for the sale of these stocks, I added the 1099B to my return but I don't know what to do with form 3922

[TomYoung · Accepted solution]

When you sell stocks that you've acquired via an ESPP, such a sale can create "compensation" income that can be included on your W-2, (or not, depending on the circumstances), and you need to add the compensation to your "out of pocket" cost for the stock.  Your basis is not simply the discounted price that you paid, though this very likely is the basis the broker has reported on the 1099-B.

If the sale of the stocks did create compensation reported on your W-2 and you don't add the appropriate amount to your out of pocket costs when reporting the sale then you're reporting the same income twice; once as compensation income and then again as an overstatement of gain on sale.

If you know the correct amount of basis to use then enter the 1099-B exactly as it reads and then click the blue "I'll enter additional info on my own" button.  On the next page enter the correct basis in the "Corrected cost basis" box. 

But if you are unsure of the correct amount of basis to use for the sale then go back to that sale, ask TurboTax to "Guide me step by step" and tell TurboTax that you're selling stock acquired through an ESPP.  That's where the Form 3922 information gets entered and TurboTax uses that information to calculate the correct amount of basis.

Tom Young

(SINCE THE DEVELOPERS CHANGE THE SECURITY SALE INTERVIEW EVERY SINGLE YEAR I'LL NOTE THAT THIS ANSWER'S DIRECTIONS ON HOW TO CORRECT THE BASIS FOR THE SALE PERTAINS TO THE 2016 INCOME TAX YEAR.  I'M SURE THAT THE INTERVIEW WILL CHANGE IN THE YEARS AFTER THAT.)

[joanne0130]

That helps a lot! Thank you!

[CapB]

To add Form 3922 (Transfer of Stock Acquired Through Employee Stock Purchase Plan...):

1. Sign In or Open TurboTax

2. Click on "Take me to my return" (Online)

3. Select "My account" on top right of screen (Online)

4. Click on "Tools" (Online)

5. Choose "Topic Search" (Online) or "Search Topics" (Desktop)

6. Type "Form 3922" and push "go" to continue through the Form 3922 interview.

If you already filed your return, you will need to amend your return first.

Wait for your return to be accepted or rejected by the IRS.

See FAQ below to Amend 2016 Online:

https://ttlc.intuit.com/replies/5567856

See FAQ below to Amend 2016 in Desktop:

ttps://ttlc.intuit.com/replies/5114143

[joanne0130]

Thank you

[JDummie]

I've gathered form 3922 for reference. But it is unclear how to calculate the 'adjusted cost basis'. There isn't an item on the form that directly calls this out and Turbotax support could not figure it out even after escalation. Any guidance on doing this? 

[hbl3973]

joanne0130,

There is also a TurboTax help document that gives the step-by-step info on the mechanics of what to do:

https://ttlc.intuit.com/community/entering-importing/help/where-do-i-enter-form-3922/00/26375

[411n4m3574k3n]

To calculate the adjusted cost basis using your form 3922, you will use a "Range of Dates" when you got an option to buy the espp stocks.
For example the 3922 will have a range between January 2nd and march 31st between column 1 and column 2. This means that you had the option to buy ESPP stocks during that time, that same row will contain the values of the stock at different times during that range of dates, things like price at grant date or price at exercise date.

If you want to know during which period you made the purchase (hence which row's data to input in turbo tax software to calculate the cost basis for a stock sell) you will have to match the 1099-B "Date of Aquisition" date to the date range of the 3922 form. 

For example if you have a Date of Aquisition in your 1099-B of 04/23/2019, you would use the row with Date option granted = 04/01/2019 and Date option exercised = 06/30/2019 in your 3922 form. This is because April/23/2019 is between April/01/2019 and June/30/2019

NOTE1: The form 3922 might need to be from a previous year and not form current year. This happens when you sell shares that were acquired years ago but sold this year.

NOTE 2: The Adjusted cost basis value in the supplemental information of your 1099-B should already consider these calculations so there is no need for you to do them, they should be accurate.

[JB21964]

TurboTax asks if I purchased my ESSPs at a discount, which I did.  Do i need to enter the 3922 from the year in which i purchased my ESSPs?

[DavidD66]

Yes, you should enter the information reported on Form 3922.  The taxation of gain on the sale of ESPP shares can vary depending on multiple factors.  I recommend you review the information in the following TurobTax Tax Guide:

Employee Stock Purchase Plans

And here is a video on how to enter ESPP sales in TurboTax:

How do I enter Employee Stock Purchase Plan (ESPP) sales in TurboTax?