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Thanks, Dick. Your explanation makes sense to me. I'll certainly check with my employer but at least I have some idea of what's going on now.

Now, mind you, it doesn't matter much, since short term gain and regular income are taxed at the same rate.

This is true. My main concern about this issue (as I'm sure you probably know but I'll state it anyway) is that when I sell ESPP shares that I have held for less than the holding period, I need to report the sales to my company. That information is then reported on my W2 as "OCOMP". While the tax turns out the same as short term capital gains, the paper work is quite different from a tax form perspective.

This brings up a point that I think TMF hammers home frequently. That is, while I would love to have a tax specialist handle this for me I should at least understand what's going on. Don't take other people's word when its your money! Of course, after I confirm with my employer that my OCOMP calculation is correct, I'll probably hire a tax preparer to fill out the forms since I hate that stuff!

Thanks again, Dick, and happy new year to all you Fools!


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