Alisa Baker
In Part 4 we consider the taxation of employee stock purchase plans (ESPPs) that are not qualified under Section 423, and the tax issues of down markets, death, and withholding.
Timothy A. Farmer and Gregory G. Geisler
You can build your employee stock purchase plan into your long-range savings and retirement strategy. This article compares buying company stock at a discount through your ESPP to putting the same money into your 401(k) or another retirement plan.
Bruce Brumberg
Employee stock purchase plans (ESPPs) are popular and prevalent at most public companies. However, the structure of these plans is changing. These modifications may affect your decision to participate in your ESPP and its place in your financial planning.
Bruce Brumberg
Stock purchases made through an ESPP during a calendar year are reported to you and the IRS on Form 3922 early in the following year. This article explains what you need to know about the information on the form, and how the form can help you better understand the complexities of ESPP taxation.
Bruce Brumberg and Lynnette Khalfani
UPDATED FOR 2013! This tax return season has the potential to be more confusing than most if you sold stock last year. Read this article for tips on reporting stock sales and on other crucial tax return topics.
The myStockOptions.com Tax Team
UPDATED FOR 2013! Learn how to report your sales of stock on the new Form 8949 and revised Schedule D of IRS Form 1040.
Bruce Brumberg
UPDATED FOR 2013! The stock-sale information provided by brokers on IRS Form 1099-B has changed. Cost-basis reporting, both for your broker on Form 1099-B and for you on your tax return, is now more complex, confusing, and vulnerable to errors. This article explains the crucial facts you must know to avoid overpaying tax or attracting unwanted IRS attention.
Bruce Brumberg
UPDATED FOR 2013! If there's a way to make learning about tax forms fun, we'll try it. Learn how to prevent costly tax return mistakes with this animated presentation on IRS Form 1099-B, IRS Form 8949, and Schedule D.
Matt Simon
When you think about year-end financial and tax planning, don't forget to review shares acquired through an employee stock purchase plan. This article outlines issues and strategies to contemplate.
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It is easy to make tax return mistakes that lead to paying more than necessary or (perhaps worse) an IRS review. This tax season in particular will be more confusing than most because of the new Form 1099-B, the new Form 8949, and the significantly revised Schedule D...
If you sell ESPP shares in a qualifying disposition, you still realize ordinary income in the year of sale. You should...
You report the sale on Form 8949 and Schedule D to show your capital gain or loss, regardless of any actual gain or loss. This is the difference between...
The new Form 8949 is where you list the details of each stock sale, while Schedule D aggregates the column totals from this form to report your total long-term and short-term capital gains and losses. However...
Your brokerage firm issues
IRS Form 1099-B by mid-February in the year following the year of sale. Form 1099-B is an important document that you must have to complete your tax return...
Major changes in the tax reporting and filing for stock sales became effective in 2012 (i.e. starting with stock sales made in 2011). The revised reporting and filing rules now apply every tax season...
When your W-2 income is added to the price you paid for the stock, this is your cost basis on your tax return. The table below presents the compensation portion of your tax basis for all types of stock grants and ESPPs...
The new Form 8949 is where you now list the details of each stock sale on your tax return, while the revised Schedule D is where you now merely aggregate the column totals from Form 8949 to report your total long-term and short-term gains and losses. From our interpretation of the forms and their instructions, myStockOptions.com recommends the following reporting steps to avoid overpaying taxes...
If you sell ESPP shares in a qualifying disposition, you still...
With a tax-qualified ESPP, nothing appears on your W-2 until you sell the shares. In that year, income is reported in the following boxes of your W-2...
The gain from your ESPP purchase is totaled on the W-2 with other income in the following boxes...
You may have both ordinary income and capital gain when you meet the holding-period requirements (this is a qualifying disposition under the tax code). The answer depends on whether...
If you sell or otherwise dispose of the stock without meeting the holding period rules, then you owe taxes for the spread between the...
Employee stock purchase plans cannot be "underwater" in the traditional sense of having a purchase price greater than the current stock price. Down markets can create special opportunities and unique issues for ESPPs. For example, with an ESPP...
Yes, when the market price of the stock has dropped after purchase and you make a disqualifying disposition of the shares...
Assuming this is still a tax-qualified ESPP, the tax treatment stays the same even with no lookback, though it gets even more confusing when...
Nothing in connection with an ESPP purchase is reflected on your Form W-2 unless...
You will need to gather certain information to complete your tax return. The broker will send you IRS Form 1099-B for the proceeds...
ESPPs do not usually set a commission on purchases, so the company is probably not paying a commission directly for you. In the common ESPP structure, the broker or transfer agent charges...
Assuming you have no power to refuse or delay your stock sale for cash, there is...
A disqualifying disposition occurs if you sell, transfer, exchange, gift, or donate the stock that you acquired without...
You can gift shares purchased from a qualified Section 423 ESPP after the holding requirements are satisfied without disqualifying consequences. However, you do not completely escape taxation...
You can donate shares purchased from a qualified Section 423 ESPP after the holding requirements are satisfied without the disqualifying consequences of a premature transfer. However...
If you sell company shares for a loss and buy more company shares within 30 calendar days before or after the loss transaction, the federal tax code will...
The tax treatment of sales by your estate depends on whether you or the estate purchased the shares. Death is considered a qualifying disposition of the shares, regardless of how long you have held the shares. If you purchase the stock but die before its disposition, you have...
A number of tax law provisions that may affect your stock grants were introduced in the American Jobs Creation Act (AJCA); the final regulations on deferred compensation under IRC Section 409A, which adopt the...
A casualty or theft loss would allow you to deduct the lost amount against your ordinary income, subject to some limits. However, Treasury regulations and court rulings would probably stand in your way. Nevertheless, what you can do is...
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Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
Test your knowledge with our ESPP quiz.
Listen to our new podcast on the basics of ESPPs!
Fundamentals Of Employee Stock Purchase Plans (Part 4): Down Markets And Other Tax Topics 
