I contribute to my ESPP and when I cash in my shares it gets put in my paycheck so do i just use my w-2 to fi?

Question

can i use my w-2 to file or am i supposed to receive some other form?

Answer 1

No, you'll get a statement that shows the stock transactions. You will need to compute the gain or loss on the sales of the stocks. Any net gain is taxable as ordinary income unless you held them for more than 1 year before cashing them in. Stocks that you held for more than 1 year will have the gain treated as long-term capital gains and will be taxed at a lower rate.

You might want to get some professional assistance in sorting that out. Stock transactions can be tricky and the IRS isn't very polite when you mess it up.

Answer 2

This assumes that you sold your ESPP within 2 yrs of the first day of the offering period.

Here is the simplest way to look at this:

First Step:
Value on purchase date (shares*stock price on purchase date)
- Purchase Amount (shares*purchase price)
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$$$$$$$$$ (this amount should be included on your W2, if not you have to added it in. Check w/ your HR if it is included or not)

Second Step:
Value when sold ((shares*stock price when sold)-commission)
- Value on purchase date (shares*stock price on purchase date)
--------------------------------------------------------------------------------------------
$$$$$$$$$ Report this as 1099-B