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Are my sold company stocks, not part of a 401k or retirement plan, taxable?

I did not receive a form and I believe that I already paid taxes on them.
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1 Reply
ColeenD3
Expert Alumni

Are my sold company stocks, not part of a 401k or retirement plan, taxable?

See an excerpt below from Employee Stock Purchase Plans

See this LINK for more information.

 

But what about taxes?

When the company buys the shares for you, you do not owe any taxes. You are exercising your rights under the ESPP. You have bought some stock. So far so good.

When you sell the stock, the discount that you received when you bought the stock is generally considered additional compensation to you, so you have to pay taxes on it as regular income.

  • If you hold the stock for less than a year before you sell it, any gains will be considered compensation and taxed as such.
  • If you hold the shares for more than one year, any profit will be taxed at the usually lower capital gains rate.
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