I have shares of IBM that I purchased years ago through the Employee Stock Purchase Plan (ESPP) at a 15% discount. The last time I sold some IBM shares back in 2007, I understood the "basis" of the stock to be my actual cost of the shares PLUS the 15% discount added back in. Thus the capital gain would be the price I sold it at MINUS commission MINUS (actual cost + the 15% discount). And I would have to add that 15% back as Ordinary Income on my tax return. This method is described in a Turbotax article (search for: turbotax espp)
Now with regards to the Kyndryl spin off, to compute the basis of the Kyndryl stock, I would multiply the IBM basis X 4.18% as mentioned above.
The question I have is what should I use as the IBM basis in this calculation... The actual cost. Or the actual cost PLUS my 15% discount?
