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ESPP calculator

Is my ESPP sale qualifying?

Enter your purchase and sale to see the tax, your adjusted cost basis, and whether waiting to qualify would save you money.

Your tax profile (used by every tool)

ESPP: is my sale qualifying, and what will I owe?

Purchase
Sale
Disqualifying disposition
Estimated tax on this sale
$2,361
Your purchase price / share$17.00
Ordinary income (wages)$6,500
Long-term capital gain$2,000
After-tax profit$6,139
Qualifies on or afterJun 2, 2027
If you wait until Jun 2, 2027 and sell at the same price, you'd owe about $260 less in tax. That only pays off if the stock doesn't drop more than that in the meantime.
Check your 1099-B. Your broker will likely report a cost basis of $17.00/share. Your adjusted basis is $30.00/share. Use the adjusted basis, or you'll pay tax on $6,500 twice.

ESPP in plain English

  • You buy company stock at a discount (often 15%), using payroll deductions.
  • With a lookback, the discount applies to the lower of the price at the start of the offering or at purchase. When the stock has risen, that's an instant gain well above 15%.
  • A sale is qualifying only if it's more than 2 years after the offering date AND more than 1 year after the purchase date. Anything earlier is disqualifying.

How each sale is taxed

  • Disqualifying: the full discount at purchase (purchase-date FMV minus what you paid) is taxed as ordinary income. Any move after purchase is a capital gain or loss.
  • Qualifying: ordinary income is the lesser of your actual gain or the discount measured at the offering date. Everything else is long-term capital gain.
  • The 1099-B trap: your broker usually reports only what you paid as your cost basis. If you don't adjust it on Form 8949, you pay tax on the discount twice.

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