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re: Employee Stock Purchase Program
Posted on 8/9/16 at 9:37 am to dirtsandwich
Posted on 8/9/16 at 9:37 am to dirtsandwich
quote:
What am I missing here? If stock is trading at $10 and he buys at $9 then immediately sells at $10, he pays taxes on the $1 gain so he makes 60-65 cents per share (minus transaction costs). Not sure I would buy a lot for the long term as you already have exposure to your company's downside through your employment, but why not flip a few shares?
The only way OP's description makes sense to me is if the *entire* share price is considered income if you sell within the first year, kind of as a trap door to keep the company from using the stock buy to back door payroll and save on taxes.
Any tax professionals know whether this kind of thing exists?
1
Posted on 8/9/16 at 10:27 am to Joshjrn
quote:Here is the best explanation I have seen.
The only way OP's description makes sense to me is if the *entire* share price is considered income if you sell within the first year, kind of as a trap door to keep the company from using the stock buy to back door payroll and save on taxes.
I haven't seen where the entire purchase price is treated as income - only the discount and capital gains.
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