I am in my mid-20s and the company I work for has an Employee Stock Purchase Plan (ESPP), where I can have money taken out of my paycheck each week and pooled with other employees' contributions to buy the company's stock.
I am comfortable with where I am with my emergency and retirement savings, and am now looking to begin saving to buy a house. I can accept the risk associated with putting part of the down payment in stock- I can just rent for a while longer, or save more cash if the stock goes down. The company is large and likely not going anywhere soon. I plan on saving about $120/week for a year or two in stock, and a similar amount in cash.
My question is, for the purposes of planning, how do taxes work for these kinds of arrangements? I plan on saving for over a year, so Long Term Capital Gains Tax will apply when I sell the stock- assuming at a higher price, and my understanding is correct. But would it only apply to part of the stock if I sold it at once? Or would I need to stop participating in the ESPP and then wait a year or more to sell (hopefully at higher price) in order to get the better tax rate?
Otherwise, are there better ways to grow a down payment for a house if I am willing to save for a few years? CD rates are still terribly low. My goal is to get a good interest rate for a shorter length mortgage (10 or 15 years, if one at all), though I honestly do not know what price range I'll be looking at I'm a few years. Thank you for any input!
Submitted April 02, 2017 at 05:56AM by Nicky941 http://ift.tt/2owNF81
