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posted Feb 15, 2022 11:32:23 AM

Shouldn't the compensation income entry on ESPP be included in wages if no W2 received? I have a sale with a discount and no W2. Can't get it in ordinary income.

Every amount I enter on "amount of compensation income for this sale" on the "Let's enter your ESPP sale details" gets blanked after I leave the screen.  The program figures the correct basis adjustment but doesn't include the adjustment in ordinary income.  The help says it will if the amount is not already included on the W2.

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1 Replies
Expert Alumni
Feb 15, 2022 4:25:52 PM

If you have no w2, then you must have acquired the ESPP before 2021, when you did work for the company. The basis of your ESPP is the amount you paid (previously included in your income, on your w2) plus the amount of the discount you received. The sale is entered in stock sales using your 1099-B.

 

I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s, 5498, and any 8606 forms.

 

This will protect you down the road as proof of your basis in your various investments. As you go through life, rollovers, ESPP sales, and more will be captured for you. When you do sell, your notebook will be invaluable with knowing what was first, the order, the basis, and the lot size for stocks.

 

See: