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pyoush
Returning Member

ESPP Tax Question

Hello,

 I've 5 different ESPP lots that I've sold this year. Both had 15% discount (lookback) - 

  1. Lots 1 through 4 - Qualifying disposition (they were acquired over 5 years ago)
  2. Lot 5 - Disqualifying disposition (acquired early 2023 and sold late 2023)

For #2, "ordinary" income was included in Box1 W2 as compensation income. Box 14 (DISQD) has this compensation income as well.

For #1, "ordinary" income was NOT included in Box 1 W2. After I go through the ESPP interview questions ( Wages & Income > Investments and Savings), TT is treating both 1 and 2 together to include the "total ordinary income" from both under "W-2 disposition" for ESPP plan type. If I check the "Reported on W-2" box here, it would be incorrect as the portion of ordinary income for #1 above (Lots 1 through 4) was never reported on my W2. 

 

How do I fix this in TT?

 

TT-ESPP-W2-Disp_question.png

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1 Reply
DavidD66
Expert Alumni

ESPP Tax Question

I suggest you only enter lots 1 - 4 as Employee Stock Purchase Plan sales.  For lot 5 report it without indicating it was employer stock/ESPP shares.  Your cost basis in lot five is the discounted amount you paid, plus the amount of your discount that was included in your W-2 as wages.  Entering like that will prevent the program from treating all five lots the same.  

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