Internal Revenue Code:Sec. 6039. Returns required in connection with certain options
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle F - Procedure and Administration
CHAPTER 61 - INFORMATION AND RETURNS
Subchapter A - Returns and Records
PART III - INFORMATION RETURNS
Subpart A - Information Concerning Persons Subject to Special
Provisions
Statute
Sec. 6039. Returns required in connection with certain options
(a) Requirement of Reporting
Every corporation -
(1) which in any calendar year transfers to any person a share
of stock pursuant to such person's exercise of an incentive stock
option, or
(2) which in any calendar year records (or has by its agent
recorded) a transfer of the legal title of a share of stock
acquired by the transferor pursuant to his exercise of an option
described in section 423(c) (relating to special rule where
option price is between 85 percent and 100 percent of value of
stock),
shall, for such calendar year, make a return at such time and in such
manner, and setting forth such information, as the Secretary may by
regulations prescribe.
(b) Statements To Be Furnished to Persons With Respect to Whom
Information Is Reported.--Every <<NOTE: Corporations.>> corporation
making a return under subsection (a) shall furnish to each person whose
name is set forth in such return a written statement setting forth such
information as the Secretary may by regulations prescribe.
The <<NOTE: Deadline.>> written statement required under the preceding
sentence shall be furnished to such person on or before January 31 of
the year following the calendar year for which the return under
subsection (a) was made.
(c) Special rules
For purposes of this section -
(1) Treatment by employer to be determinative
Any option which the corporation treats as an incentive stock
option or an option granted under an employee stock purchase plan
shall be deemed to be such an option.
(2) Subsection (a)(2) applies only to first transfer described
therein
A statement is required by reason of a transfer described in
subsection (a)(2) of a share only with respect to the first
transfer of such share by the person who exercised the option.
(3) Identification of stock
Any corporation which transfers any share of stock pursuant to
the exercise of any option described in subsection (a)(2) shall
identify such stock in a manner adequate to carry out the
purposes of this section.
(d) Cross references
For definition of -
(1) the term ''incentive stock option'', see section
422(b), and
(2) the term ''employee stock purchase plan'' (FOOTNOTE 1)
see section 423(b).
(FOOTNOTE 1) So in original. Probably should be followed by a
comma.
Sources
(Added Pub. L. 88-272, title II, Sec. 221(b)(1), Feb. 26, 1964, 78
Stat. 73; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A),
Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96-167, Sec. 7(a), Dec. 29,
1979, 93 Stat. 1276; Pub. L. 97-34, title II, Sec. 251(b)(5), Aug.
13, 1981, 95 Stat. 259; Pub. L. 101-508, title XI, Sec.
11801(c)(9)(J), Nov. 5, 1990, 104 Stat. 1388-526; Pub. L. 105-206,
title VI, Sec. 6023(20), July 22, 1998, 112 Stat. 825.)
Miscellaneous
PRIOR PROVISIONS
A prior section 6039 was renumbered section 6040 of this title.
AMENDMENTS
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 403. RETURNS REQUIRED IN CONNECTION WITH CERTAIN OPTIONS.
(a) In General.--So much of section 6039(a) as follows paragraph (2)
is amended to read as follows:
``shall, for such calendar year, make a return at such time and in such
manner, and setting forth such information, as the Secretary may by
regulations prescribe.''.
(b) Statements to Persons With Respect to Whom Information Is
Furnished.--Section 6039 is amended by redesignating
subsections (b) and (c) as subsections (c) and (d), respectively, and by
inserting after subsection (a) the following new subsection:
``(b) Statements To Be Furnished to Persons With Respect to Whom
Information Is Reported.--Every <<NOTE: Corporations.>> corporation
making a return under subsection (a) shall furnish to each person whose
name is set forth in such return a written statement setting forth such
information as the Secretary may by regulations prescribe.
The <<NOTE: Deadline.>> written statement required under the preceding
sentence shall be furnished to such person on or before January 31 of
the year following the calendar year for which the return under
subsection (a) was made.''.
(c) Conforming Amendments.--
(1) Section 6724(d)(1)(B) <<NOTE: 26 USC 6724.>> is amended
by striking ``or'' at the end of clause (xvii), by striking
``and'' at the end of clause (xviii) and inserting ``or'', and
by adding at the end the following new clause:
``(xix) section 6039(a) (relating to returns
required with respect to certain options), and''.
(2) Section 6724(d)(2)(B) is amended by striking ``section
6039(a)'' and inserting ``section 6039(b)''.
(3) The heading of section 6039 and the item relating to
such section in the table of sections of subpart A of part III
of subchapter A of chapter 61 of such Code are each amended by
striking ``Information'' and inserting ``Returns''.
(4) The heading of subsection (a) of section 6039 is amended
by striking ``Furnishing of Information'' and inserting
``Requirement of Reporting''.
1998 - Subsec. (a)(1). Pub. L. 105-206 inserted ''to any person''
after ''transfers''.
1990 - Subsec. (a)(1), (2). Pub. L. 101-508, Sec.
11801(c)(9)(J)(i), added pars. (1) and (2) and struck out former
pars. (1) and (2) which read as follows:
''(1) which in any calendar year transfers a share of stock to
any person pursuant to such person's exercise of a qualified stock
option, an incentive stock option, or a restricted stock option, or
''(2) which in any calendar year records (or has by its agent
recorded) a transfer of the legal title of a share of stock -
''(A) acquired by the transfer or pursuant to his exercise of
an option described in section 423(c) (relating to special rule
where option price is between 85 percent and 100 percent of value
of stock), or
''(B) acquired by the transferor pursuant to his exercise of a
restricted stock option described in section 424(c)(1) (relating
to options under which option price is between 85 percent and 95
percent of value of stock),''.
Subsec. (b)(1). Pub. L. 101-508, Sec. 11801(c)(9)(J)(ii),
substituted ''an incentive stock option or an'' for ''a qualified
stock option, incentive stock option, a restricted stock option, or
an''.
Subsec. (c). Pub. L. 101-508, Sec. 11801(c)(9)(J)(iii), amended
subsec. (c) generally, striking out references for definitions of
''qualified stock option'' and ''restricted stock option''.
1981 - Subsec. (a)(1). Pub. L. 97-34, Sec. 251(b)(5)(A), inserted
'', an incentive stock option,'' after ''qualified stock option''.
Subsec. (b)(1). Pub. L. 97-34, Sec. 251(b)(5)(B), inserted
''incentive stock option,'' after ''qualified stock option,''.
Subsec. (c)(4). Pub. L. 97-34, Sec. 251(b)(5)(C), added par. (4).
1979 - Subsec. (a). Pub. L. 96-167 substituted ''Furnishing of
information'' for ''Requirement of reporting'' in heading, and in
closing par. substituted provisions relating to the furnishing, on
or before Jan. 31 of the following calendar year, a written
statement in such manner and setting forth such information, as
prescribed by regulation for provisions prescribing the making of a
return at such time and in such manner as prescribed by regulation,
determining qualified stock options, restricted stock options or
options granted under an employee stock purchase plan to be options
under the provisions of this section, and restricting the necessity
of a return only to the first transfer of such share.
Subsec. (b). Pub. L. 96-167 added subsec. (b). Former subsec.
(b), requiring every corporation making a return to furnish each
person named in the return a written statement setting forth such
information as prescribed by regulation, and requiring such
statement to be furnished before January 31 of the year following
the calendar year for which the return was made, was struck out.
Subsec. (c). Pub. L. 96-167 redesignated subsec. (d) as (c).
Former subsec. (c), requiring any corporation transferring any
share of stock pursuant to the exercise of an option described in
subsec. (a)(2) to identify such stock, was struck out.
Subsec. (d). Pub. L. 96-167 redesignated subsec. (d) as (c).
1976 - Subsecs. (a), (b). Pub. L. 94-455 struck out ''or his
delegate'' after ''Secretary''.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 403(d) <<NOTE: 26 USC 6039 note.>> Effective Date.--The amendments made
by this section shall apply to calendar years beginning after the date
of the enactment of this Act.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable with respect to options
granted on or after Jan. 1, 1976, and exercised on or after Jan. 1,
1981, or outstanding on Jan. 1, 1981, or granted on or after Jan.
1, 1976, and outstanding Aug. 13, 1981, see section 251(c) of Pub.
L. 97-34, set out as an Effective Date note under section 422 of
this title.
EFFECTIVE DATE OF 1979 AMENDMENT
Amendment by Pub. L. 96-167 applicable with respect to calendar
years beginning after 1979, see section 7(c) of Pub. L. 96-167, set
out as a note under section 6652 of this title.
EFFECTIVE DATE
Section applicable to stock transferred pursuant to options
exercised on or after Jan. 1, 1964, See section 221(e) of Pub. L.
88-272, set out as an Effective Date of 1964 Amendment note under
section 421 of this title.
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit
taken into account prior to Nov. 5, 1990, for purposes of
determining liability for tax for periods ending after Nov. 5,
1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 424, 6724 of this title.
