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Author: JeanDavid Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Re: ESPP - Qualifying Disposition - TTax Date: 3/7/1998 7:50 PM
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<<I do not know what a Qualifying Disposition is (I assume it is a sale), but the capital gains are reported on Schedule D. From there it is transferred to line 13 of form 1040. I assume you enter your cost basis in column e of the form and the sale price in column d and follow the rest of the Schedule D instructions.>

The qualifying disposition needs to be reported as normal income. The amount of this income is the discount I received from the ESPP program. The program allows you to purchase stock at a discount to the fair market value. When you sell the stock, that discount is considered income, not capital gains, but I do not know how to get TTax to allow me to report it. >

How were the transactions related to this reported to you? Was the discount reported to you on a W-2? If so, I suppose it just goes in along with everything else on line 7. If it is only on a 1099B, that would be only the sale, and that would go on Sched. D.... If all else fails, I suppose you could stick it on line 21 (Other Income) with an explanation. You might consider studying IRS PUB 550 (Investment Income and Expenses) and IRS PUB 551 (Basis of Assets).

<I've gone through the TTax interview and entered the sales onto schedule D, but as far as I can tell, it does not allow you to make this adjustment to the capital gains. >

Well, you would not wish to touch the sale price, since it must agree with the 1099B that you must have received. So it is either some kind of adjustment to the cost basis (if taxible at capital gains rates) or to your Wages, Salaries, Tips, etc., on line 7 of the 1040.
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