Esop?

[Don B]

Client had bellsouth stock sales reported on 1099B. There were three sales, one May, one in June, and one in July for a total of $5500.

This client has not been able to locate her year end statements for any year. The stock was a payroll deduction for shares that began in 1999. I am assuming that this is an ESOP that she is participating in, but she has no idea.

Can anyone give me a clue about getting an aquisition date and basis on this? Can it somehow work as a wash?

[LCP]

I think you mean an ESPP (Employee Stock Purchase Plan) not an ESOP (E S Ownership Plan).

[Unregistered]

If its an ESSP there will be no wash. The usual 15% discount given on the purchase will be reported as ordinary income when the stock is sold 9and increases the stock basis). Assuming there's a gain, the rest is capital.

[S T]

15%

But isn't the 15% stock discount accounted for in the W-2 income. I just had one with McKesson, and his W-2 was grossed up for the discount. If so wouldn't this add to the stock basis.

Sandy

[Don B]

Thanks

for the replies. My client did finally get all the statements since 1999. It's just like the WalMart plan.

Don B

[Unregistered]

More often than not, the 15% discount will not be in the W-2. Reason - the employee will often hold the stock after purchase and sell later to take advantage of the growth in value & the L.T. capital gains.

[Sam Slade]

Espp

More often than not, the 15% discount will not be in the W-2. Reason - the employee will often hold the stock after purchase and sell later to take advantage of the growth in value & the L.T. capital gains.

The amount to include as ordinary income will be the lesser of sale price minus option price or FMV at grant minus option price provided the holding period requirement is met and this will be included in income when the stock is sold. All gain above ordinary income is long-term capital gain.