This answer fills in some of the details you are unsure about, since I'm further along than you.
I bought the ESPP shares in 2012. I didn't sell immediately, but in 2015, so I qualify for the long-term capital gains rate.
Here's how it was reported:
2015 W2 from BigCorp
The 15% discount was reported on a W2 as
BOX 1. WAGES TIPS AND OTHER INCOME: $882
it was also mentioned twice in the info box (not all of my W2's come with one of these)
QUALIFIED DISPOSITION ESPP: $882
DISQUALIFYING DISP OFFSET: $882
2015 1099-B from Etrade
This showed the sale trade, with my cost basis as the discounted price of $5000.
And for interests sake, I also got the following in 2012:
- 3922 which documents the grant price, exercise price, fair market value and count of shares.
- Etrade transaction statement which contains actual purchase price for the lot.
WARNING! This means that just going ahead and entering the numbers means you will be taxed twice! once as income and once as capital gains.
I only noticed this was happening because I no longer worked for the company, so this W2 only had this one item on it.
This is another example of the US tax system baffling me with its blend of obsessive compulsive need for documentation coupled with inexplicably missing information that's critical to sensible accounting.
Update - I have now filed this year, and learned more:
The 1099 documents must (says the IRS since 2015) show the basis value as the award price (your discounted price).
So reading the form 8949:
Note: If you checked Box D above but the basis reported to the IRS was
incorrect, enter in column (e) the basis as reported to the IRS, and
enter an adjustment in column (g) to correct the basis.
We discover the number is incorrect and must adjust. The actual value you need to adjust it by may be reported on your 1099, but also may not (I have examples of both).
I calculated the required adjustment by looking at the W2, as detailed above.
I gleaned this information from the following documents provided by my stock management company (you should the tax resources section of your provider):
- Etrade's "Reporting The Sale of Employee Stock Purchase Plan" or
- Schwab's "Cost Basis Facts For Stock Plan Participants".