Ihave a question regarding non qualified stock option excercise and did not receive form do i need to report this in my income?

[patelrpn]

I have excercised non-qualified stock option but did not receive for 3921 from my employer-

Do I need to included the gain in my taxable income?

[TomYoung · Accepted solution]

The exercise of a non-qualified option should not result in you receiving a Form 3921.  That form would be appropriate if this option was a statutory option, commonly referred to as an Incentive Stock Option (ISO). 

The simple exercise of a non-qualified stock option creates compensation calculated as:

      (GROSS # of shares acquired at exercise) x (per share spread between "FMV" at exercise and exercise price).

and that compensation is included in your W-2.

It's not clear what you mean by "gain" here; I'm guessing that you sold the stock the same day you acquired it and did not receive a 1099-B for the sale.  (That guess is arising from your use of the word "gain" and "did not receive a form".)

If I've guessed accurately, then you really do not to do anything else.  Brokers are not required to issue a 1099-B for same day sales and without a 1099-B you have no reporting obligation.  You might want to report the sale anyway, telling TurboTax "no 1099-B was received" as a typical "same day" sale results in a small loss due to selling commissions and fees.

Tom Young