How is espp taxed?

Cisco Lowlow
Jan 27, 2018 11 Comments

Cisco actually gives all the espp at the end of 6 months. I have read somewhere if you sell stock after more than a year you are taxed half . So my question is if you want to avail that tax exemption should you sell it after 1 year when it gets deposited like after 6 months?


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TOP 11 Comments
  • Yahoo 7xyz2a
    You pay income tax on the bargain element between sale price (price after the discount) and market price on the day of grant. Any gains or losses from there are treated as capital gains. However, if you sell within two years of the first day of the offering period, you’ve triggered a disqualifying event, so you’ll be taxed at income tax rates for any gains. Long Term Capital Gains rates don’t kick in until the two year mark.
    Jan 27, 2018 6
    • Yahoo 7xyz2a
      I did say that. :)
      Jan 27, 2018
    • Cisco Lowlow
      So this is different from buying stocks and selling stocks in market though? Like you can sell in one year for long term gains in general stock market?
      Jan 27, 2018
    • Yahoo 7xyz2a
      *stock, not stocks

      Yes, the tax rules for selling ESPP shares of your company’s stock are different than they are for buying and selling shares on the open market.
      Jan 27, 2018
    • LinkedIn 5!
      2 years or 1 year after offering date? Isn’t long-term capital gains tax rate used after 1 year mark?
      Jan 28, 2018
    • Yahoo 7xyz2a
      @5! As I said in my comment, the rules are different for ESPP. It is two years after offering date. Also as I said.
      Jan 28, 2018
  • Oracle Delphi
    Typically specified in your brokerage account which portion is short term vs long term.
    Jan 27, 2018 1
    • Yahoo 7xyz2a
      Does yours tell you what’s still a disqualifying disposition? I’ve never seen that.
      Jan 27, 2018
  • Cisco bucks
    ESPP gains won’t be taxed until you sell
    Jan 29, 2018 0
  • Cisco / Eng

    Cisco Eng

    They didn’t tax me last two times but this time, they taxed me 33% on the difference of grant price and market price. I didn’t sell the yet but still taxed
    Jan 28, 2018 0