MichiganMan wrote:
- quote -

owe taxes for 2008, you should file timely or make a payment with
your 2008 extension (Form 4868) to file.

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Thank you so much for the response.

Another question...I filed for an extention till March 6th so I could
get the paperwork around for this 2007 audit. Is it possible to send
in my 2008 for a tax refund while this audit is pending? The reason I
ask is, the IRS instructions said it could take over 8 weeks to
respond to my paperwork. That will leave me over the April 15th mark.

Thank you again for your help!

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Seth wrote:
- quote -

ESPP plans are statutory stock options. As such, there is no
income element at the time the option is exercised. There is only
an income element when the shares are sold. This person appears
to be selling on the date of purchase. That is a disqualifying
disposition that creates compensation income equal to the
difference between FMV on the date of purchase and the price paid.

If you want to read a terrific explanation on how you handle ESPP
stock, see:
http://www.fairmark.com/execcomp/espp/dispositions.htm

- quote -

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In article <422c21c2-8b4f-463e-8e59-c16db8927a79[at]a12g2000pro.googlegroups.com> ,
MichiganMan <WebLord[at]aol.com> wrote:
- quote -

That's wrong. The cost basis is the amount you paid, plus the amount
you paid Income Tax on (the discount).

Consider: you paid $30/share when the price was $45. What really
happened was that your company paid you a $15 bonus, and you paid $45
for the stock. That's why you paid Income Tax on the $15.

- quote -

That's right; you might not even have sold it. The discount is still
income.

- quote -

Your co-worker's CPA is right.

Seth

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This question is regarding being taxed twice under an employee stock
purchase plan. The company allows us to buy a set amount of stock at a
discounted price, in this case $30.81 x 164 shares. That brings the
purchase price to $5052 and the proceeds from the sale showing on the
1099-B are $7391. But when I purchased the stock, I then had been
taxed on the difference between the market price the day I paid for it
($45), amounting to payroll deductions over $800 . I then sold it for
the near the same price ($45).

The way my taxes have been filed the past 8 years on my Capital Gains
and Losses form is by putting the first amount ($5052) the price I
actually paid for the stock in the cost basis column. Thus showing
that I made close to $2400 on the sale of the stock.

My question is, why did I get taxed initially from the company through
payroll deduction for the $800 on the total taxable income amount
(Market value at the time I bought it - purchase price= $2400), and
then had this added to my total earnings for the year, thus getting
taxed once again. From the statement on the company tax info I was
sent after buying the stock (below) it says it will already by added
into my yearly earnings, known as a w-2. So, it should already be in
there, not added again.

This was on the paperwork I received from the company (my comments are
in parenthesis):

The difference between the sale price under the ESPP ($30.81) and the
market price when elected to receive is subject to additional
compensation to the employee and subject to income and SS taxes. The
difference between the exact market value (either $45.56 the market
price the day I purchased it from the company, or the $45.0725, the
price I sold it for through a broker, both similar but I assume the
first because payroll wouldn't know what I sold it for), will be
included on your final statement of income and final tax withheld at
the end of the year, known as your W-2, which will be delivered to you
at the end of the year.

My co-worker's CPA has been filing her stock purchase capital gain/
loss form as the price it was when you bought it (market value in my
case, $45 X 164) and was already taxed on, in the cost basis column,
the price she sold it for in the "sold it for" column. In my case, it
actually came to a loss of $80. But it was filed as a gain of $2400,
as if I never paid any taxes on it at all?

Who is right? I am lost. I need help please!!!

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