Additional Information Regarding Tax Form 3922
You are receiving this package because the corporation whose stock was issued to you is
required to send you a Form 3922 upon the first transfer of legal title of shares acquired
from a qualified Employee Stock Purchase Plan (ESPP). Generally this transfer of legal
title occurs whenever you purchase Employee Stock under a Section 423 Qualified
Employee Stock Purchase Plan. Fidelity Stock Plan Services is providing a copy of Form
3922 on Sprint’s behalf.
Please save the Form 3922. It contains important tax information to help you file
your taxes in the event you dispose of (sell) this stock. Remember, when you dispose
of stock acquired under a Employee Stock Purchase Plan, you may have taxable ordinary
income to report – in addition to any gains or losses you may have.
Tax laws are complex and subject to change. State and local taxes also may apply, and
the rules governing these taxes may vary from federal income tax rules. Your actual
income tax consequences depend upon your individual circumstances. You should
always consult a qualified tax advisor regarding your own particular situation.
If you have questions about the information provided, please call a Stock Plan Services
Representative at 800-544-9354, between the hours of 5 p.m. Sunday and midnight
Friday Eastern time.
From outside the United States, dial the access number of the country you are in, and
when prompted, dial 1-800-544-0275 to speak with a Stock Plan Services Representative.
Representatives are available Monday through Friday, 8 a.m. to 8 p.m., local time,
excluding holidays of the New York Stock Exchange.
ESPP Shares Transferred Through Fidelity
Please note that Form 3922 contains information about only your calendar year 2013 purchases under the
Employees Stock Purchase Plan and multiple transactions may be included within a single form. However,
you may receive two Forms 3922 for year 2013. Due to the July 10, 2013 merger with Softbank, Sprint has
a new publicly traded parent company. If you participated in the Sprint Employees Stock Purchase Plan for
the first or second quarters of 2013, you were issued stock by Sprint Nextel Corporation (with federal
identification number 48-0457967) and you are receiving a Form 3922 from that company. If you participated
in the Sprint Employees Stock Purchase Plan for the third or fourth quarters of 2013, you were issued stock
by Sprint Corporation (with federal identification number 46-1170005) and you are receiving a Form 3922
from that company.
If you held these shares at the time of the Softbank Merger Closing: The closing of Softbank Merger
resulted in what is called a “disqualifying disposition” of the ESPP shares regardless of whether you received
a combination of cash and new Sprint stock or only new Sprint stock in exchange for the ESPP shares since
you did not hold the shares for two years from the grant date. The “disqualifying disposition” resulted in the
inclusion of income on your 2013 Form W-2 equal to the difference between the market value of the ESPP
shares on the date of purchase and the purchase price, and causes the tax basis of your ESPP shares to be
equal to the market value of the stock on the purchase date. Any new Sprint shares you received in the
Softbank Merger are not treated as ESPP shares. Thus a subsequent sale (or other disposition) of those new
Sprint shares during or after the required ESPP holding period will not result in either a disqualifying or
qualifying disposition. More information regarding the tax consequences of the Softbank Merger can be found
by reviewing the Form 8937 at www.sprint.com/investors> Shareholder Services > Cost Basis, Corporate
Actions & Employee Ownership.
If you sold these shares in 2013 before the Softbank Merger or sold these shares in 2013 that were
acquired after the Softbank Merger: You will need to report a capital gain or loss on your 2013 tax return
equal to the difference between the proceeds from your sale and the market value of the shares on the
purchase date. Since you did not hold the shares for two years from the grant date, you had what is called a
“disqualifying disposition” which resulted in the inclusion of income on your 2013 Form W-2 equal to the
difference between the market value of the shares on the date of purchase and the purchase price. The
amount of income included on your Form W-2 causes the tax basis of your ESPP shares to be equal to the
market value on the purchase date.
If you gifted these shares in 2013 before the Softbank Merger or gifted these shares in 2013 that were
acquired after the Softbank Merger: Since you did not hold the shares for two years from the grant date,
you had what is called a “disqualifying disposition” which resulted in the inclusion of income on your 2013
Form W-2 equal to the difference between the market value of the shares on the date of purchase and the
purchase price. The amount of income included on your Form W-2 causes the tax basis of your ESPP shares
to be equal to the market value on the purchase date. Since you received no proceeds from the transfer of the
shares, no additional income is required to be reported for income tax purposes.
If you did not sell or transfer these shares in 2013 which you acquired after the Softbank Merger:
Nothing needs to be reported on your 2013 income tax return. Please save the Form 3922. It contains
important tax information to help you complete your tax return when you subsequently sell (or otherwise
dispose of) your shares purchased through the ESPP after the Softbank Merger. Remember, when you
dispose of stock acquired through the ESPP (after the hold period had been met, i.e., not a disqualifying
disposition), you may have taxable ordinary income to report – in addition to capital gains or losses.
ESPP Shares Transferred Through Computershare
You are receiving a Form 3922 because our records indicate that during 2013 you transferred shares of
Sprint Nextel Corporation originally acquired through the Sprint Employees Stock Purchase Plan
(formerly the Sprint Nextel Employees Stock Purchase Plan and the United Telecommunications, Inc.
Employees’ Stock Purchase Plan). This form contains information about ESPP shares for which you
received an actual stock certificate for Offerings prior to 1996. During 2013 you cancelled this certificate
as a result of a sale or transfer, as a result of a deposit with Computershare for the shares to be held in
book entry form, or as a result of an exchange of shares related to the July 10, 2013 merger with
SoftBank.
If you sold these shares in 2013 prior to the SoftBank merger: You will need to report the sale on
your 2013 tax return. If you have a gain on the sale of your shares, the gain will be treated as ordinary
income to the extent of the discount you would have received if the shares had been purchased on the
grant date. Any gain over and above the grant date discount is capital gain. If you sold the shares at a
loss, the loss will be capital loss, and you have no ordinary income to report.
If you gifted these shares in 2013 prior to the SoftBank merger: If the market value of the shares on
the date of the gift exceeds the purchase price of the shares, you must report ordinary income on your
2013 tax return. The ordinary income is equal to the lesser of (1) the excess of the market value of the
stock on the date of the gift over the purchase price, and (2) the discount you would have received if the
shares had been purchased on the grant date. This same rule applies to dispositions upon death
pursuant to the laws of descent and distribution.
If you held these shares on July 10, 2013 and exchanged them in the SoftBank merger: You have
made a “qualifying disposition” of the shares. A qualifying disposition occurs when you exchange the
shares more than two years after the date of grant and more than one year after the purchase date. If
you had a realized gain in the exchange of the shares in the merger, the realized gain will be treated as
ordinary income to the extent of the discount you would have received if the shares had been purchased
on the grant date. This ordinary income must be reported on your 2013 tax return regardless of whether
you received only shares of new Sprint stock or whether you received a combination of cash and shares
of new Sprint stock. Any new Sprint shares you received in the SoftBank Merger are not treated as
ESPP shares. Thus a subsequent sale (or other disposition) of those new Sprint shares will not result in
a qualifying disposition. More information regarding the tax consequences of the Softbank Merger can
be found by reviewing the Form 8937 at www.sprint.com/investors> Shareholder Services > Cost Basis,
Corporate Actions & Employee Ownership.
Stock Plan recordkeeping and administrative services are provided by Fidelity Stock Plan Services, LLC.
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