Espp

[Gretel]

Please confirm that I have this right:

2010 ESPP granted and purchased - Purchase price 21.35, FMV 25.12

$3.77 should have been included in compensation, basis for calculating gain is $25.12?

Does FMV on purchase date being lower than FMV on grant day have any bearing?

[appelman]

Yes it does.

FMV on purchase date is what counts. See, for example:

https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Employee-Stock-Purchase-Plans/INF12047.html

[Gretel]

Thanks, Appleman, I looked at this article already but somehow the numbers reported do not make sense applying the rules or maybe I am just dense:

These are qualifying dispositions since grant date and purchase date were in 2010.

FMV Grant date 23.79
PurchPrice 21.35
FMV Purch 25.12
SalesPrice 39.2501

Total gain $2,147.02
Ord.income $154.64

25.12 - 23.79 = 1.33 x 130 = 179.90 ord.income per my calculations

39.2501 - 25.12 = 14.1301 x 130 = 1,836.91

Can anyone set me straight? Thanks!

[appelman]

I think not.

Based on the Intuit example (Situation 3): W2 income = 23.79 - 21.35. Then 39.25 - 23.79 is long-term capital gain. In this case, the FMV at purchase doesn't matter. (I believe it would have, had it been less than the FMV at grant, which is what I thought you said in your original post.)

Thanks, Appleman, I looked at this article already but somehow the numbers reported do not make sense applying the rules or maybe I am just dense:

These are qualifying dispositions since grant date and purchase date were in 2010.

FMV Grant date 23.79
PurchPrice 21.35
FMV Purch 25.12
SalesPrice 39.2501

Total gain $2,147.02
Ord.income $154.64

25.12 - 23.79 = 1.33 x 130 = 179.90 ord.income per my calculations

39.2501 - 25.12 = 14.1301 x 130 = 1,836.91

Can anyone set me straight? Thanks!

[Gretel]

Thanks again. I actually found a good entry sheet in my software. It actually a little more complicated and beyond me to explain but I think I know now what I need to do.