Where do I fill form 3921

[vamathur]

I want to fill information for form 3921 ( Exercise ISO option ) .
When I go to "Other Tax Situations -> AMT , I get the Page "Tell us about your Mortgage"
and then it says you do not have to pay any AMT

[TomYoung · Accepted solution]

Actually you do need to report the exercise of ISO stock if you did not sell all of the stock  before year end, and you do that by entering Form 3921 into TurboTax.  The interview you need is the "ISO Exercise and Hold" interview that's in the "Investment Income" section.  That's where you'll enter your Form 3921 and that's where TurboTax gets its information for the AMT adjustment.

After entering all your other income/deductions/credits information cruise through the "Alternative Minimum Tax" interview that's under the "Other Tax Situations" tab.  If you sold some or all of the stock then you can use the Form 3921 to help determine the basis of the stock when you enter the sale via the "Stocks, Mutual Funds, Bonds, Other" interview.

So, enter the Form 3921 if you didn't sell all the stock by year end using the "ISO Exercise and Hold" interview.  You can enter the Form 3921 if you sold some or all of the stock during the year and use the ISO "guide me" stock sale interview.  Alternatively, if you know the correct basis to use for the sale - which is not the amount reported by the broker on the 1099-B - then you don't need to enter the Form 3921; you simply enter the 1099-B as it reads and then tell TurboTax you need to correct the basis.

Tom Young

[hcmartini]

Which version of Turbo Tax do I use to do this? Thanks!!

[IreneS]

You can use any version of TurboTax, however, form 3921 is an informational form only.  It is generally not entered on your tax return unless you then sold the stock, or if you could be subject to alternative minimum tax (AMT).

When you receive form 3921, this means that your employer transferred stock to you because you exercised an incentive stock option (ISO). Because this is a statutory stock option, there are generally no tax consequences for having exercised the option.

To be on the safe side, you can enter the information contained in form 3921 in case you are subject to AMT or to have the information available for future sale of the stock.   

Please follow these steps:

1. While in your federal return, click the Search icon in the top right of your screen.
2. Type 3921 in the box and click the magnifying glass.
3. In the search results, click the Jump to 3921 hyperlink.
4. Continue through the interview, entering the requested information.

@hcmartini

[bellstealer]

I entered Form 3291 from "ISO Exercise and Hold" interview, and entered 550 in "Number of Shares Transferred (Box 5)". Since I actually sold 50 of 550 ISO in the same day, so I entered that 50 ISO from "Stocks, Mutual Funds, Bonds, Other" interview. Then after going through "Alternative Minimum Tax (AMT)"interview from "Other Tax Situation", when I clicked "show more" for my "Alternative Minimum Tax" it still showed the total dollars for 550 ISO in "Incentive stock options" line, which made the "Alternative Minimum Taxable Income" higher than expected. Turbotax didn't disqualify disposition the 50 sold ISO from the 550 exercised ISO, do you know why? or should I enter 500 in "Number of Shares Transferred (Box 5) " from "ISO Exercise and Hold" interview, even it's not what Form 3291 says?

[TomYoung]

"should I enter 500 in "Number of Shares Transferred (Box 5) " from "ISO Exercise and Hold" interview, even it's not what Form 3291 says?"

That's the best and safest approach.  Absolutely nothing that you enter from Form 3921 is transmitted to the IRS in your income tax return so there's no "matching" issues here. 

[bellstealer]

Got it, thanks!