Jenny" <cjsh2125[at]hotmail.com> wrote:
[snip]

- quote -

If you're in the 15% bracket, your capital gains rate would
be 5%. So selling the qualified shares will still incur less
of a tax bill.

Watch the bargain element, though: the 15% bargain-purchase
element of your ESPP stock is ordinary income, regardless.

--
Chris Green

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Christopher Green" <cj.green[at]worldnet.att.net> wrote:
- quote -

Since my tax rate is 15%, it is better than capital gain tax
(25%). So better to sell 'disqualified shares' as ordinary
income? I paid 15% less than market price and some are
trippled already and would like to cash in..

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Jenny" <cjsh2125[at]hotmail.com> wrote:

- quote -

"423b disqualified" doesn't mean you can't sell them, just
that the tax consequences are different.

423 is the Tax Code section governing ESPPs. It includes a
holding period requirement, which I believe is two years
from the subscription date or one year from the purchase
date.

If you sell disqualified shares, that sale is a
"disqualifying disposition", and your gain on the sale is
ordinary income. Employers are supposed to track
disqualifying sales and report them on W-2s.

Regulations on selling stock in ESPPs have been in flux for
years and are at present about as clear as old motor oil. In
this situation, seeking professional advice is a Very Good
Thing.

--
Chris Green

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I have some company stocks bought via employee stock
purchase plan. Since they are doubled, I am thinking about
selling them. But I noticed that some shares marked as 423b
disqualified.

Anyone can tell me what 423b is about?? I know I have to pay
tax on the gain. but 423b means I cannot sell them?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->