[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

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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

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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]