If you didn't sell ALL the shares acquired by year end, then you do need to put that information into TurboTax.
Tell TurboTax about the shares unsold at year end using the "ISO Exercise & Hold" interview. TurboTax will make an adjusting entry for these unsold shares (# of shares unsold) x (per share "spread" between FMV and strike price) on Form 6251. That interview will ask for your Form 3921 information.
Tom Young
Thanks for the answer, Tom.
I actually didn't sell ANY options yet - just bought them and am holding ALL of them. Do I still need to fill in both 3921 & 6251 forms? I ask because TurboTax is counting the amount twice against me. Please, let me know. Thanks!
Since you're using "online" TurboTax it may or may not be making the adjustment twice, or maybe making the adjustment one way once and a different way the second time.
Look here
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4714061-does-entering-iso-exercise-hold-bargain-element-in-wages-income-interview-and-iso-adjustment-amount-in-other-tax-situations-double-count-amt-liability">https://ttlc.intuit.com/questions/4714061-does-entering-iso-exercise-hold-bargain-element-in-wages-income-interview-and-iso-adjustment-amount-in-other-tax-situations-double-count-amt-liability</a>
for that discussion. Since I don't use "online" and the moderators haven't come back with any conclusion I'm unable to know, (and you probably are unable to know, unless you can look at Form 6251), exactly what's going on here. My impression from the long conversation at that post is that "something's not right", but exactly what's not right I can't really say.
In DESKTOP TurboTax - which is so much better in every way than "online" TurboTax, in my opinion - I know the exact answer: Enter your information using the "ISO Exercise and Hold" interview, and that's all you need to do. My seat of the pants advice is that you should enter ONLY the "ISO Exercise and Hold" information, and nothing else.
It's my understanding that when you pay for online TurboTax all the Forms, Schedules and Worksheets that comprise your income tax return become available to you. If you're going to use TurboTax anyway, pay their fee and look at your income tax return, particularly Form 6251. (I understand that with online TurboTax only the Forms, Schedules and Worksheets actually comprising your income tax return are available to you). With desktop TurboTax you can see EVERY Form, Schedule and Worksheet that TurboTax supports. You should see that ISO adjustment exactly once, as an add-back to your regular taxable income. If you see it either doubled up or reported twice, then something's wrong.