For an ESPP which buys stock every two weeks with each pay check, what is the first day of offering period? And is the grant date price the same as purchase date price?

[rehrenbard]

Additionally, for the price I paid, should I put in 85% of share price, or the amount I paid divided by shares I received? They are slightly different (I believe due to rounding on purchase) based on my account statement. I am planning to go with the actual amount paid since that seems more accurate but want to confirm.

[RobertG]

Use the amounts from Form 3922.

To report ESPP sales in TurboTax:

When you enter your 1099-B information you will be asked: 'Do these sales include any employee stock? This includes ESPP, RSU, RS, NQSO, and ISO' Say yes.

Then you will be asked 'What type of investment did you sell?' Select ‘Employee Stock Purchase Plan, (ESPP) '

Check the box that says 'The cost basis is incorrect or missing on my 1099-B'

Then select 'I need help figuring out my cost basis'

You will be prompted to enter your ESPP and Form 3922 information.

[rehrenbard]

Thanks @RobertG I've already done that. After doing so though it has me enter each purchase of stock, and I did not receive a Form 3922 so I am entering it myself.

As part of that it asks me to enter the First day of your offering period - what is this? My offering period runs April - March, however for the year I started I joined in July and first purchased in August. Which date do I enter? Or can I leave this blank and just include my purchase date?

It also asks for Market price on grant date (per share) - what is this? Is it the same as the purchase date since there is no grant? Or can I also leave this blank and just put in purchase price?

It also asks for Price you paid per share - do I calculate this based on total shares received / price paid by me? Which is different than my discount % but seems more accurate.

I also have to split out the shares purchased with dividends into a separate sale right? My sale contained RSUs, ESPPs and dividend reinvestments. So I am planning to split into 3 sales proportionally.

Thank you!

[RobertG]

You really need the 3922 to get this right. 

Without it, you may end up paying more or less tax than you should.  You should be able to get the 3922 from your broker or Human Resources department.

The grant date is usually the first day of the offering period. This is sometimes called the enrollment date. For numerous reasons, the grant date is important in ESPPs that are tax-qualified under Section 423, as it: starts the clock for tax purposes.  

So you need to know the grant date. The IRS does, your employer sent them a copy.

[rehrenbard]

What are you supposed to do without the Form 3922? I reached out to our plan administrator and they directed me to the transaction history. Which does not have anything but the transaction date of when the shares were purchased. How am I supposed to move forward?

[ThomasM125]

The way this normally goes is the discount for the shares you purchased is reported on your W-2 form in box 1 as ordinary income. Then, you receive a form 1099-B reporting the sale of the stock.

The cost basis on the form 1099-B normally does not list the discount amount reported on the W-2 form, so normally you can simply report the form 1099-R information in TurboTax as listed on the form and then enter an adjustment for the cost basis to make it right. You enter the adjustment when you enter the form 1099-B information by clicking on the "I'll enter additional information on my own" option on the entry screen:

 

So, if you can determine the income associated with the stock sales that was reported on your W-2 form, you can normally add that to the cost basis reported on your form 1099-B, and assuming the income was reported on your W-2 form, that is all you need to do to account for the ESPP stock sales.

[rehrenbard]

@ThomasM125 @RobertG can you please clarify, Turbo Tax is asking me for the first day of the offering period for my ESPP.

Since my plan runs April - March, is this April 1st of the year of the plan for which I purchased the stock?
For the year I joined should it by my hire date since I was not employed on April 1st of that year?

Thank you.

[ThomasM125]

April 1st would be the first day of the offering, accept for the year of your hire, in which case it would be your hire date.

[rehrenbard]

Thank you @ThomasM125 ! And then is it okay to leave the Market price on grant date (per share) blank? Since I don't know what that would be unless I google it? It isn't listed in any of my transaction history statements from computershare.

Thanks again!