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

thank you, Chris..
Now I understand.

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

- quote -

See previous messages on this thread, especially #4.

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

- quote -

Look for the rules on "ESPP" (you'll get a lot more hits on
that than on "423b").

There are three components to the income you get from
selling ESPP stock: long-term capital gain on "qualified"
stock (stock you held long enough to qualify), ordinary
income on "disqualified" stock (stock you didn't hold long
enough), and ordinary income on the bargain element (the
difference between market value and the strike price of your
option, often 15% or so).

So if you bought company stock worth $100 a share at $85 a
share, you have a bargain element of $15 a share. No matter
what, that's ordinary income.

If you held that share long enough to qualify and sold it
for $150, you would also have a long-term capital gain of
$50.

If you did not hold the share long enough and sold it for
$150, you would also have ordinary income of $50.

If you sell a mixed bag of qualified and disqualified stock,
you will have a mixture of ordinary income and long-term
capital gain, figured on so much of your stock as is
qualified and so much as isn't.

If you sell some of your shares but not all, I believe it's
first in-first out: you are considered to have sold the
oldest shares first. I don't know whether it's possible to
designate lots to be sold with an ESPP, because you don't
hold the stock certificates.

Tax on these components is at whatever the rate in your tax
bracket is for long-term capital gains and ordinary income.

--
Chris Green

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Can anyone advise me what's implication of selling stocks with 423B?

what are tax rate on 423B ?

or can anyone point me where to look for?

I am trying to sell my company shares (some are over 2
years, and some are less than 1 year) and would like to know
tax implicatoin before I jump.

thanks

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