Filing taxes for the first time with ESPP involved and was able to follow along with the ESPP guide from TheFinanceBuff regarding adjusting the cost basis to avoid being taxed twice. However my company also does something called "Share Withholding" in where they'll sell fractional shares at the time of purchase and refund the extra via payroll afterwards. This was noted in a tax guide PDF
"You pay tax withholding liabilities through the ESPP share withholding process by selling shares with a value equal to your tax withholding liability. Company also pays you cash for any remaining fractional share you acquired. You should report these share sales in detail on IRS Form 8949, which rolls up to Schedule D.
You will incur no gain or loss on these transactions, as the share sale proceeds equal the basis of the shares sold, and you pay no commissions or other fees. Therefore, you should report the value of the shares sold on Form 8949 in order to roll up to Schedule D as both the “Sales Price” in column (d) and the “Cost or Other Basis” in column (e)."
It sounds like I have to report this "sale" but since only a fractional amount was sold and I got a refund for the remaining percentage how do I report this? Do I report this with
- one entry for the full price of the stock
- only the fractional portion of the stock sold
- break it down into two entries
For example: one entry with sales price and cost basis = 300 or two entries splitting the fractional shares .5 sold and .5 refunded (150 sales price / cost basis each entry)?
You'll need to sign in or create an account to connect with an expert.
One entry for the whole and fractional shares is fine. For purposes of the reporting on this form it is not necessary to differentiate between the shares that went to withholding and the fraction that was refunded to you.
As you've indicated, you will list the proceeds and cost basis showing the same value. You will also indicate that this transaction is not reported on form 1099-B.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
jmzchz5560
Returning Member
mstruzak
Level 2
connorgregg
New Member
kvakati
New Member
Raftinfool
Returning Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.