Hi, all of my coworkers at microsoft have been complaining that tax software such as turbotax and h&r block calculate the cost basis for espp purchases incorrectly. Could you help me understand how to calculate taxes for the following espp scenarios (without lookback)? And how to I adjust the cost basis in turbo tax manually to correct the calculations? [calculations in brackets are my current understanding of how the $ is taxed, so please correct them. oi=ordinary income taxed, st= short term taxed, lt= long term taxed]
normal scenario:
offering period start date: 1/1/2020 FMV 80
purchase/exercise date: 3/31/2020 FMV 100, discounted to 90 (actual price paid)
sold date: 6/1/2020 (<1 year after purchase) FMV 110 [oi: 100-90=10, st: 110-100=10]
sold date: 6/1/2021 (1 year after purchase, <2 years after offering date) FMV 120 [oi:10, lt: 120-100=20]
sold date: 6/1/2022 (>2 years after offering date) FMV 150 [oi: ?, lt: ?]
discount price lower than offering scenario:
offering period start date: 1/1/2020 FMV 95
purchase/exercise date: 3/31/2020 FMV 100, discounted to 90 (actual price paid)
sold date: 6/1/2020 (<1 year) FMV 110 [oi: 10, st: 10]
sold date: 6/1/2021 (1-2 years) FMV 120 [oi:10, lt: 20]
sold date: 6/1/2022 (>2 years) FMV 150 [oi: 95-90=5, lt:150-95=55]
market went down during offering period scenario:
offering period start date: 1/1/2020 FMV 110
purchase/exercise date: 3/31/2020 FMV 100, discounted to 90 (actual price paid)
sold date: 6/1/2020 (<1 year) FMV 110 [oi: 10, st: 10]
sold date: 6/1/2021 (1-2 years) FMV 120 [oi:10, lt: 20]
sold date: 6/1/2022 (>2 years) FMV 150 [oi: 110-90=20, lt:150-110=40]
market went down after purchase scenario:
offering period start date: 1/1/2020 FMV 80
purchase/exercise date: 3/31/2020 FMV 100, discounted to 90 (actual price paid)
sold date: 6/1/2020 (<1 year after purchase) FMV 95 [oi: ?]
sold date: 6/1/2021 (1 year after purchase, <2 years after offering date) FMV 95 [oi: ?]
sold date: 6/1/2022 (>2 years after offering date) FMV 95 [oi: ?]
