Thank you @GeorgeM777 . The examples are very helpful. So in my case, there is a capital gain, which means it is possible that the '15% price difference multiplied by the number of stocks' could have been included in W2 box 1 as compensation. I will have to do some calculations to figure that out. As a general rule, is it up to the organization to decide whether to include it in box 1? Or is it normal practice for an org. to include that amount in box 1?
My clarifying question is, in example 1, if the stock was exercised and also if stock was sold (at a higher price) within 1 year of the grant date, and IF it was included in the W2 box 1, would the amount included in box 1 still follow the same calculation of '15% price difference multiplied by the number of stocks'? Per your earlier message this would fall under a non qualifying disposition and so would receive unfavorable tax treatment, but I don't know if this means that IF it was entered in W2 box 1, then it would follow the same calculation as if it was a qualifying disposition. Thanks again 🙂
