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  • On June 1, 2022 company's stock price was 100$
  • On November 30, 2022 company's stock price was 150$
  • On December 1, 2022 company purchased 10 shares for 85$.
    • 15% discount applied to stock's price on June 1,2022.
  • On December 15, 2022 I sold these 10 shares for 120$.

What is the cost basis per share for this sale? 85$ or 100$?

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  • Is this a qualified or non-qualified ESPP? What was the grant date of the ESPP (it could be June 1, 2022, but it might also be earlier)? edit: Actually, the grant date won't matter since it's a disqualifying disposition anyway.
    – Stan H
    Jan 31 at 21:00
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    What income tax were you charged when you received the shares?
    – GS - Apologise to Monica ♦
    Jan 31 at 21:14

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If this is a qualified ESPP and,

  • Offering start FMV = $100
  • Offering end (aka purchase date) FMV = $150
  • Discount % = 15% (actual purchase price = $85)
  • Sale price = $120

This is a disqualifying disposition.

The cost basis for capital gains/(losses) is the purchase date FMV = $150/sh.

The ordinary income component is your purchase date FMV minus your actual purchase price = $150 - $85 = $65/sh.

The capital gains component is your sale price minus your basis = $120 - $150 = -$30/sh.

So for 10 shares, you would recognize ordinary income of $650 and a short-term capital loss of ($300).

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