IRS, Tax related strategies--Traders Message Board

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Strategies & Market Trends : IRS, Tax related strategies--Traders

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To: RavMan who wrote (791)	4/12/1999 5:16:00 PM
From: Scott	of 1383

Does anyone know how to calculate taxes on the employee stock purchase plan? The shares that are bought through employee stock purchase plan (Not the STOCK OPTIONS), usually it is referred as ESPP and you get to buy shares at 85% of the market price. If I sell the shares within a week after they are posted to my account do I just as a short term sale. You have to report the sale to your company, and then they include it on your W2 as ordinary income. Since your broker also shows it as a stock sale on your 1099, you have to adjust the cost basis of the stock so that you are not taxed twice. There are some complicated calculations having to do with the market value at the time of the purchase, as far as what is considered ordinary income and what is considered st capital gains. My company recently sent us some information on this, and I will send it to the email address you have listed in your profile. I don't want to post it, since I rather not be giving tax advice on a message board. You should really read your ESPP plan description, and talk to your company's ESPP coordinator so that you can understand how to deal with these transactions. Scott

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