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Level 2
posted Feb 4, 2025 4:39:32 PM

Adjusted Cost Basis for ESPP

What makes up the adjusted cost basis for a sale of ESPP stock?

 

Is it the purchase price + dividends + company match (which was already taxed as regular income)?

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3 Replies
Expert Alumni
Feb 4, 2025 5:03:03 PM

No. The adjusted basis for ESPP is the actual price you paid per share (the discount price) times the number of shares, plus the amount reported as compensation (added into your wages).

 

 

Refer to the TurboTax Help article Employee Stock Purchase Plans (Situation #1) for additional information.

Level 2
Feb 5, 2025 8:40:02 AM

So simply put it would be the actual price I paid per share plus any compensation that was reported on the W2 (which in my case would include divedends and the company match).

 

Thank you very much!

 

 

Expert Alumni
Feb 11, 2025 2:27:12 PM

Almost. You should have:

  • form 3922
  • the w2 amount for the  ESPP company match

Dividends are not normally part of the ESPP basis as dividends create new shares. They are reported on your w2 -but are not part of the basis of the ESPP shares. Keep the parts separate.

 

When you sell the dividend shares, your basis is the amount included in your w2 for those dividends. So keep that information. 

Smart to double check!