Question

Sale of company espp stock

Forum|Forum|5 years ago
March 3, 2021
1 reply
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Sale of ESPP company shares (4 allotments). Etrade 1099-B displays:

Qty sold: proceeds, cost or other basis and gain/loss amount. An example might be:

10 $220 $150

Import into Turbo Tax, dates, proceeds and cost basis are generated properly onto form.

But when I sold my ESPP shares, my company put 'ESPP Gains' on my payslip to include the 'gains' that I received when I sold my shares (ie. $70 for my example). So I am under the impression that I have already paid capitol gains tax on my ESPP shares sold.

So when I identify these shares in turbo tax, I am thinking that I should check the box - The cost basis on my statement is incorrect and provide the 'correct cost basis'. For my example, I would input $220 ($150 cost basis + $70 'ESPP Gain' (from my payslip).

Is my assumption correct in how to report these ESPP transactions?

M

mglauner

No, don't add the amount from your W-2 to the Cost Basis reported on your 1099-B for an Employee Stock Sale. You are correct that you are paying tax on this amount as regular income. This amount represents the 'bargain element' you received on the stock's market value as an employee, but is not capital gains.

However, you still may need to adjust your Cost Basis when entering your 1099-B.

The cost basis is the actual price you paid per share (the discount price) times the number of shares, since the 'bargain element' is already included in your income on your W-2.

This link gives info on how to find the actual price you paid from your employer's Form 3922.

Click this link for detailed info on Employee Stock Purchase Plans