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Author: rdy2go One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Taxes on sale of ESPP shares Date: 3/25/2014 5:01 PM
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I am trying to compute the taxes owed on sale of shares purchased under the IBM ESPP in the 90's. I have no historical data other than purchase date of each mini-lot and the following lines from an IBM 10-K from those years:

The IBM Employees Stock Purchase Plan (ESPP) enables substantially all regular employees to purchase full or fractional shares of IBM common stock through payroll deductions of up to 10 percent of eligible compensation. The price an employee pays is 85 percent of the average market price on the last day of an applicable pay period.

My understanding is that I have to handle the 15% discount at purchase time as regular income this year, and then capital gains from the basis FMV.

I have no problem with looking up FMV for a given date. The quirk is that the recorded lot acquisition dates are the 10th of the month, but the paid price is determined by the last day of the previous month. So my doubt is if the basis should be the FMV on the recorded date or the one for the last day of month ?

Any thoughts on this ?
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Author: rdy2go One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 120609 of 121219
Subject: Re: Taxes on sale of ESPP shares Date: 3/27/2014 6:32 PM
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I figured it out from a help document on the Fidelity site. I also figured out that the entries recorded with 10th-day dates are from ESPP share DRIPS, not from ESPP purchases. The statements provided by Computershare could be improved a lot and their fees are atrocious ($60). Fortunately these were the last shares in fractional lots and I just have left a single large block that I am about to move to Fidelity.

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Author: jh4986 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 120623 of 121219
Subject: Re: Taxes on sale of ESPP shares Date: 3/28/2014 10:06 PM
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I have ESPP stocks from 2 companies, and I held both for a long time. When I sold, I found out how painful calculating ordinary income and long term capital gain is.

Both companies sent me purchase notices each time a new purchase was made with FMV, Cost base, and grant date information etc. I kept all those paper trail. Both companies also have a department who can sent out a spreadsheet of all my purchases and their full data, after I emailed them for the request.

So, I would think IBM can do that for you.

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