- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Get your taxes done using TurboTax
It appears that your discount of 15% whether based on the offering period price or the price at the end of the purchase period is consistent with a qualified plan. You mentioned in an earlier post that your ESPP plan has a look-back feature. A lookback provision bases the purchase price not on the stock price at the time of purchase but rather on the price either at the beginning of the offering period or at the end of the purchase period, whichever is lower. This ensures the offering-date price stays the same while the purchase-date price changes in longer offering periods with multiple purchase periods.
You are correct that if you link your actual purchase price to the higher price, either the offering period price or the price at the end of the purchase period, your discount may likely be more than 15%; however, for purposes of what your plan offers, namely the lookback provision, you get the benefit of choosing the lower price and basing the discount off of that lower price. As long as your discount is no more than 15% based on the price at which you can purchase, your plan remains compliant with a qualified plan.
@Anonymous
**Mark the post that answers your question by clicking on "Mark as Best Answer"