My employer offers an ESPP which allows us to purchase company stock at a 5% discount. I signed up for the plan, but was not interested in holding on to the shares for long, so I sold as soon as I acquired the shares for a ~5% gain, which translated to $1,009.
Now I'm filing my taxes. The $1,009 shows up on my W-2 on box 14 (other) with code ESPPDQ. So I'm assuming that the amount has already been reported to the IRS as regular income and the taxes withheld.
However, I now received a 1099-B from the broker that does not make a distinction between the purchase price at the 5% discount and the regular market price at the time of purchase, so when I input my 1099-B information into my tax preparation software, the $1,009 are been taxed as short-term capital gains.
So, is the income reported on my W-2 under code ESPPDQ already taxed, and I will be double taxed if I report the 1099-B at face value? Or is the income in my W-2 NOT taxed and should be treated as investment income and taxed as such separately?