1

Do i have to pay capital gains tax if i sell ESPP stock from ESPP account and bought same stock from individual broker account?

Here is an example: I have 100 shares of ESPP stock allocated at 50$ in 2019 October I sell those 100 shares from ESPP account for 80$ in 2020 June and i re-purchase same stock from my Individual broker account for 80$ on same day (or) some other day in 2020.

I wont sell these shares again in 2020. In this case i have same number of shares by 2020 end also. Since i was allocated for 50$ and sold for 80$, then it looks like profit 100X(80$-50$)=3000$. Do i need to pay tax for that 3000$ or there is no need to report since i have same amount of shares and same stock?

Please advise, Thanks in advance!

  • The custodian of the ESPP shares should allow you to transfer them to your brokerage account. Have you tried to do this? – JTP - Apologise to Monica Jul 28 at 23:25
  • @JTP-ApologisetoMonica In my experience ESPP shares cannot be transferred for 1-2 years after you receive them. I suspect this is to ensure taxes can be reported properly in the event of a disqualifying disposition. – Craig W Jul 29 at 13:11
  • Good point. If OP's only goal was to move the shares, they should wait until then. – JTP - Apologise to Monica Jul 29 at 14:26
  • @JTP-ApologisetoMonica Yes Craig is correct we cant transfer stocks from ESPP before Transferable Date(2 years from grant date in my case). My stock broker provided me option only to sell and buy it again from individual account instantly. – Vishnu Vardhan Jul 29 at 14:42
  • I'd highly suggest waiting out the 2 years. It will cost more to do what you propose. What is your goal here? – JTP - Apologise to Monica Jul 29 at 16:31
1

Yes, you will owe capital gains tax. Even if you sold and then re-purchased the shares within the same account, the answer would be the same. The only reason capital gains are not taxable is if they occur within a tax-advantaged account like a 401(k) or IRA. Additionally, there is something called a wash sale that prevents you from realizing a capital loss if you repurchase substantially identical shares within +/- 30 days of the sale. But neither of these apply to you.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.