How do I find adjusted cost basis for the sale of ESPP?

The information below explains the amounts that would show up in your W2 each time you exercised your options for your employee stock purchase plan (ESPP). You also have a cost and the combined amount is the cost per share on each date. 

An ESPP allows employee to purchase their employer's stock, usually at a discount. Holding the shares more than one year after the purchase date and two years after the grant date results in being taxed at the long term capital gain rate for the appreciation. The amount of the discount is  added to the W-2 by the employer and taxed at the ordinary rate.  For this reason the discounted amount would be added to the cost basis to eliminate double taxation on the discounted amount.  You should be able to see this amount on your W2 or Form  3922.

• Form 3922 shows the grant and exercised dates as well as the fair market value (FMV) per share on each date. It will also show the exercise price per share.

Only you and your company will have the history for your cost basis.  It's worth the time to find out because you should not have to pay tax again on the cost basis which has already been taxed.

Each date you exercised the option to purchase shares, the cost and value added to your wages is the combined total cost divided by the shares on the specific date to arrive at the cost per share.  Essentially each date where shares are purchased can and will likely have a different cost basis. Averaging is not an option for stock.

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