I just sold some ESPP stock for the first time and I'm unsure about the cost basis calculation. The stock was not bought at a discounted price. However, the company did offer a 15 cent on the dollar match. I'm not sure if or how the company contribution affects the cost basis. I received a 1099-B however there is no cost basis on it.
There is a purchase information attachment that includes sale date, proceeds, a from and to date of when the shares were purchased and a purchase basis column.
I think that the purchase basis column would be my cost basis. However, in the turbo tax screen where the ESPP sale details are entered there is a box for "Adjusted cost basis" and another for "Amount of compensation income for the sale" and I am unsure as to whether those boxes woud apply to my situation.
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Yes, you must add the matching portion your employer contributed to your basis. Your employer put that in your w2 so you did pay taxes on that extra amount. That bump in your basis decreases your gain.
Taxes on ESPPs are levied when you sell your stock--both as compensation income and as capital gains.
Your employer purchased stock on your behalf and you should have received Form 3922 -- "Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)". This form is purely informational, but is important for record-keeping.
When you sell the stock, the company will send a 1099-B, as any broker would. Any discount received on the initial purchase or other funds deemed "compensatory" will then be reported as income on your W-2 for that tax year.
That income on your W2 is part of the basis you need to be sure is reported when you enter the 1099-B. It is often not included in the basis listed on the 1099-B. It could be, so be careful and use your form 3922 and w2 to determine your correct basis.
Yes, you must add the matching portion your employer contributed to your basis. Your employer put that in your w2 so you did pay taxes on that extra amount. That bump in your basis decreases your gain.
Taxes on ESPPs are levied when you sell your stock--both as compensation income and as capital gains.
Your employer purchased stock on your behalf and you should have received Form 3922 -- "Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)". This form is purely informational, but is important for record-keeping.
When you sell the stock, the company will send a 1099-B, as any broker would. Any discount received on the initial purchase or other funds deemed "compensatory" will then be reported as income on your W-2 for that tax year.
That income on your W2 is part of the basis you need to be sure is reported when you enter the 1099-B. It is often not included in the basis listed on the 1099-B. It could be, so be careful and use your form 3922 and w2 to determine your correct basis.
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