Form 3922

Form 3922 is issued for each qualified ESPP share purchase under Section 423. It lists the offering date (or grant date), the purchase date, the FMV on each of those dates, the exercise price actually paid, and the number of shares. The form itself reports no current tax. Taxes are owed when the shares are later sold, at which point the FMV and offering date determine whether the sale is a qualifying or disqualifying disposition and how much ordinary income is recognized.

Example: an employee buys 150 ESPP shares at $59.50 on June 30. Offering-date price was $100, purchase-date price was $140, discount was 15%. Form 3922 shows these values. A sale in September three years later at $180 would be a qualifying disposition: ordinary income equals the lesser of (discount at offering = $15) or (sale price minus purchase price), producing $15 per share of wage income and the remainder long-term capital gain.

Common mistake: using the purchase price as the cost basis at sale. The ordinary income portion from the disposition is added to basis; using $59.50 alone double-counts the gain.

Form 3922 matters at every ESPP purchase year and at every future sale of ESPP shares.