They are asking for a discount percentage for ESSPP stock. Why? Suppose I do not have this info available? Thanks
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They are asking for a discount percentage for ESSPP stock. Why? Suppose I do not have this info available? Thanks

 
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They are asking for a discount percentage for ESSPP stock. Why? Suppose I do not have this info available? Thanks

"They are asking for a discount percentage for ESSPP stock. Why?"

If you purchased stock through a "Qualified" ESPP then the discount percentage used to calculate your "out of pocket" cost is needed to calculate the compensation created by the sale of the stock.  The compensation is reported as such on line 7 of the Form 1040, (it may already be there on your W-2), and gets added to your out of pocket cost to determine the basis used when reporting the sale.  From the standpoint of the TurboTax interview it's really only important when you sell stock in a Qualifying disposition, that is a sale where you held the stock

  •     more than a year after the purchase of the shares, and
  •     more than two years after the grant date.

If you sold the stock in a Disqualifying disposition the discount percentage is not, per se, so important but you do need to know the difference between your out of pocket cost and the stock's FMV at the purchase date.

"Suppose I do not have this info available?"

I guess the question then is: "what information do you have?"  It's not really necessary to use the ESPP step by step interview to report the stock sale, particularly if the sale was a disqualifying disposition and the compensation created by the sale is on your W-2.

Tom Young





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