I plan on selling my stocks before the 24 month period.
From my works website:
Q. What are my tax consequences if I sell my shares immediately upon, or soon after, purchase? Any sale of shares within twenty four months of their grant date (which is now also the same as the purchase date) is considered by the Internal Revenue Service to be a disqualifying disposition and will result in your loss of the tax deferral features which are available through the Plan. If you dispose of shares acquired under the Plan, either by sale or gift, in a transaction deemed to be a disqualifying disposition, Company Name is required to include an appropriate amount of compensation in your Form W-2. The amount of compensation included will be the difference between the stock’s fair market value at the date of purchase and the amount paid for the stock. Any additional gain or loss would be reported for tax purposes as a capital gain or loss on your personal income tax return.
Example 1: Assume you have made Plan contributions totaling $1,200 for the offering period ending May 31, 2009. Assume also that the fair market value of Company name stock was $30 per share at the end of the offering period, so that you are able to purchase 47 shares at $25.50 (85% of $30) with your $1,200 contribution. You sell the 47 shares on January 10, 2010 for $37.50 per share. Company name will include $211.50 ($30 fair market value at date of purchase, less amount paid of $25.50, times 47 shares) of additional compensation in your 2010 Form W-2. The remaining gain of $352.50 ($37.50 selling price, less $30 basis ($25.50 paid, plus $4.50 included as additional W- 2 compensation) times 47 shares) should be reported as a short-term capital gain on Schedule D of your Form 1040 for 2010. If the shares were held until June 1, 2010 prior to their sale, then the incremental gain would be long-term capital gain.
Example 2: Assume the same facts as in example 1 except that you sell the 47 shares on July 15, 2009 for $25 per share. Again, Company Name will include $211.50 ($30 fair market value at date of purchase, less amount paid of $25.50, times 47 shares) of additional compensation in your 2009 Form W-2. In this situation you will have a loss of $235 ($25 selling price, less basis of $30, times 47 shares) which should be reported as a short-term capital loss on Schedule D of your Form 1040 for 2009.
I put $650 into my ESPP and it was around $715 after the purchase. Does that just mean $64 will be put onto my W2 from? Is that a big deal?
Submitted December 19, 2018 at 08:19AM by BehindTheBrook https://ift.tt/2EuRipm