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Sparky1
New Member

Should ESPP discount entry show 15% when the purchase price is already 15% off?

In 2017, I sold ESPP shares that accumulated over several years (from Late 90's to early 2000's).  I originally purchased the shares at 15% less than the market price.  This discount is not reflected in my taxable income from those years.  TurboTax asks if I received a discount to which I entered "15%".  The next question is "Did you buy all this stock at the same time" - No (multiple purchase lots.  I do not have the original Form 3922 from these years so I entered the information myself (I was able to find the information on my companies web site).   For "The price you paid per share" entry, I provided the actual price I paid for the shares (which includes the 15% discount).  After all of the lots are entered, TurboTax tells me I have a new Cost Basis which appears to be approx 15% higher than Box 1e on the 1099-B I received.  Which is the right number?  Should I list the 15% discount?

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1 Reply

Should ESPP discount entry show 15% when the purchase price is already 15% off?

TurboTax should be correct if you answered all the questions correctly.  The broker's number only includes your "out of pocket" costs, not your out of pocket costs plus the compensation created by the sale.

Be sure to work all the way through the "Stocks, Mutual Funds, Bonds, Other" interview.  Don't simply stop when you're done entering sales.  At some point you'll come to a page where TT tells you how much compensation it has calculated and if it matches the amount reported on the W-2.  Based on what you've said here the answer it "No."

Tom Young

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