[Code of Federal Regulations] [Title 26, Volume 13] [Revised as of April 1, 2004] From the U.S. Government Printing Office via GPO Access [CITE: 26CFR] [Page 206-208] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED) Procedure and Administration--Table of Contents Sec. 1.6039-1 Information returns required of corporations with respect to certain stock option transactions occurring on or after January 1, 1964. (a) Requirement of return under section 6039(a)(1). Every corporation which transfers stock to any person pursuant to such person's exercise on or after January 1, 1964, of a qualified stock option described in section 422(b), or a restricted stock option described in section 424(b), shall make, for each calendar year in which such a transfer occurs, an information return on Form 3921 with respect to each transfer made during such year. The return shall include the following information: (1) The name, address and employer identification number of the corporation transferring the stock; (2) The name, address, and identifying number of the person to whom the share or shares of stock were transferred; (3) The name and address of the corporation the stock of which is the subject of the option (if other than the corporation transferring the stock); (4) The date the option was granted; (5) The date the shares were transferred to the person exercising the option; (6) The fair market value of the stock at the time the option was exercised; (7) The number of shares of stock transferred pursuant to the option; (8) The type of option under which the transferred shares were acquired; and (9) Such other information as may be required by the return or by the instructions issued with respect thereto. (b) Requirement of return under section 6039(a)(2). (1) Every corporation which records, or has by its agent recorded, a transfer of the title to stock acquired by the transferor pursuant to his exercise on or after January 1, 1964, of: (i) An option granted under an employee stock purchase plan which meets the requirements of section 423(b), and with respect to which the special rule of section 423(c) applied, or (ii) A restricted stock option which meets the requirements of section 424(b), and with respect to which the special rule of section 424(c)(1) applies, shall make, for each calendar year in which such a recorded transfer of title to such stock occurs, an information return on Form 3922 with respect to each transfer containing the information required by subparagraph (2) of this paragraph. (2) The return required by subparagraph (1) of this paragraph shall contain the following information: (i) The name and address of the corporation whose stock is being transferred; (ii) The name, address, and identifying number of the transferor; (iii) The date such stock was transferred to the transferor; (iv) The number of shares to which title is being transferred; and (v) The type of option under which the transferred shares were acquired. (3) If the return required by this paragraph is made by the authorized ``transfer agent'' of the corporation, it shall be deemed to have been made by the corporation. The term ``transfer agent'', as used in this paragraph, means any designee authorized to keep the stock ownership records of a corporation and to record a transfer of title of the stock of such corporation on behalf of such corporation. (4) Where a corporation is required by this paragraph to make an information return for the calendar year, such return will only have to supply information relating to the first recorded transfer of title to the share or shares [[Page 207]] of stock. Thus, for example, if the owner has record title to a share or shares of stock transferred to a recognized broker or financial institution and the stock is subsequently sold by such broker or institution (on behalf of the owner) the corporation is only required to report information relating to the transfer of record title to the broker or financial institution. Similarly, a return is required when a share of stock is transferred by the optionee to himself and another person (or persons) as joint tenants, tenants by the entireties or tenants in common. However, when stock is originally issued to the optionee and another person (or persons) as joint tenants, or as tenants by the entirety, and a stock certificate was not previously actually issued to the optionee as a sole owner, the return required by this paragraph shall be made (at such time and in such manner as is provided by this section with respect to a transfer by the optionee) in respect of the first transfer of the title to such stock by the optionee. (5) Every corporation which transfers any share of stock pursuant to the exercise of an option described in this paragraph shall identify such stock in a manner sufficient to enable the accurate reporting of the transfer of record title to such shares. Such identification may be accomplished by assigning to the certificates of stock issued pursuant to the exercise of such options a special serial number, or color. (c) Time, place, and manner of filing. (1) The returns on Forms 3921 and 3922 required by section 6039(a) (1) and (2) and paragraphs (a) and (b) of this section shall be filed as attachments to a summary report on Form 4067 which must be signed by the person required to file the returns or its duly authorized agent. With respect to returns on Form 3921, the summary report on Form 4067 shall indicate the number of returns filed, the number of shares transferred pursuant to exercise of options, the dates on which the options exercised were offered or granted, the fair market value of shares subject to option on such dates, the method by which such value was determined, the type of options under which the transferred shares were acquired, and such other information as may be required by the form or by the instructions issued with respect thereto. With respect to returns on Form 3922, the summary report on Form 4067 shall indicate the number of returns filed, the number of shares transferred, the type of options under which the transferred shares were acquired and such other information as may be required by the form or by the instructions issued with respect thereto. The summary report on Form 4067 and the attached returns on Forms 3921 and 3922 required for any calendar year shall be filed on or before February 28 of the following year with any of the Internal Revenue Service Centers. (2) If a return is made by the authorized ``transfer agent'' of the corporation, as described in paragraph (b)(3) of this section, it shall be filed with the district director for the district where the income tax return of the principal corporation is filed after the close of the calendar year for which the return is required, but on or before February 28th of the following calendar year. (3) For provisions relating to the extension of time for filing the returns required by this section, see Sec. 1.6081-1. (4) For provisions relating to the time for performance of an act when the last day prescribed for performance falls on Saturday, Sunday, or a legal holiday, see Sec. 301.7503-1 of this chapter (Regulations on Procedure and Administration). (d) Stock to which this section applies. The rules of this section shall apply to any full share of stock acquired pursuant to the exercise of any qualified or restricted stock option, or any option granted under an employee stock purchase plan, irrespective of whether the transfer of stock pursuant to such excercise qualified for the special tax treatment of section 421 and the regulations thereunder. In addition, the rules of paragraph (b) of this section shall apply to any full shares of stock received in respect of stock which was originally acquired pursuant to the exercise of an option described in the preceding sentence. See section 425(b). For definitions of the terms ``exercise'' and ``transfer'' see paragraphs (f) and (g) of Sec. 1.421-7. A return is required under [[Page 208]] paragraph (b) of this section irrespective of whether the transfer of the title constitutes a disposition of such stock as defined by section 425(c). [T.D. 6887, 31 FR 8813, June 24, 1966]