ESPPs

[erin_oceanside]

Hi - is there a tax penalty for cashing out any ESPPs during 2023?  

[AmyC]

The year 2023 has no special rules for ESPP disposition. The only difference is how long you hold the ESPP for it to be ordinary income or taxed at the more favorable capital gains rate.

The rules for more favorable treatment of statutory stock options (ISO and ESPP) are:

• One year after the stock was transferred to the taxpayer or
• Two years after the option was granted