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rehrenbard
Level 2

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

Since it is reported as income in the year I purchased the stock, wonder if I should treat this as normal stock (non-employee) or ESPP (where it asks my what the discount is).

Turbo Tax makes me choose a stock type when entering the sale. But choosing ESPP seems to do weird calculations when I put in that I got a 15% discount and then the purchase prices.

Since it was reported as income maybe I say I did not get a discount?
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Accepted Solutions
DavidD66
Employee Tax Expert

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

If your employer actually purchases 15% of the stock and reports that as income, as opposed to allowing you to purchase it a 15% discount, then I would not indicate that you received a 15% discount.  

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6 Replies
DavidD66
Employee Tax Expert

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

If your employer actually purchases 15% of the stock and reports that as income, as opposed to allowing you to purchase it a 15% discount, then I would not indicate that you received a 15% discount.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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rehrenbard
Level 2

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

Thank you! That is what I think is accurate as well. But I should put it as acquired through an ESPP with 0% discount right  @DavidD66 ?

 

They do purchase it for me and report as income in the year it was purchased.

 

Essentially after being entered with 0% discount these are treated just as regular stock with long term gains since it was all purchased at the stock price (and cost basis matches what the bank provides, which they also thought was accurate).

 

Thanks!

 

Thanks again!

TomYoung
Level 13

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

"But I should put it as acquired through an ESPP with 0% discount right"

@rehrenbard 

 

NO.  It's simply NOT an ESPP stock in any way, shape or form.  You report your sales as plain-vanilla "stock", a stock no different than a stock you bought through your broker.  You paid 100% of the full price of the stock with after-tax money. 

rehrenbard
Level 2

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

Thanks @TomYoung . @DavidD66 can you confirm the same? The only option besides ESPP in Turbo Tax is Stock (non-employee) which just seemed incorrect to choose.

Because technically this stock is bought by company from my pay check, so it was acquired in a way only employees can get it. So I figured it would be an employee stock purchase plan.

 

Also the taxes work out exactly the same if I say it was an ESPP with 0% discount or regular stock. TurboTax doesn't let me change what type of stock it is without requiring me to re-enter all the purchases. However its the same as on my 1099-B so I'd probably just not re-enter and go with my 1099-B

 

Thanks!

TomYoung
Level 13

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

"The only option besides ESPP in Turbo Tax is Stock (non-employee) which just seemed incorrect to choose."

That non-employee stock is the correct option to choose as your employer's program is in no way shape or form an "ESPP" as that term is statutorily defined. 

If you got the correct answer by going through the ESPP guided interview there's no need to change anything, but it really wasn't necessary to use that interview.  If you go and look at the detail of that sale it should be completely indistinguishable from any sale of stock that you purchased through a broker.  The stock will have your employer's name associated with it but if it's a public company you might have bought that same stock through a broker in the first place.

rehrenbard
Level 2

I have a Stock Match By Employer, where my employer purchases 15% of stock and this is reported in income in that year. Is sale of this stock reported as an ESPP?

Awesome, thank you!

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