On Sun, May 24, 2020 at 4:36 AM Michael Jaison <[email protected]>
wrote:
> Most of the companies offer ESPP stock options, which has a complicated
> tax implications as well.
>
> Example:
> Grant date: 2019-01-01, Price: $100
> Vest date: 2019-06-30, Price: $110
> Discount price: $85. (15% discount on lower price of grand and vest date)
> Sale date: 2020-07-01, Price: $120
>
> My current option is:
>
> 2019-06-30 * "ESPP buy"
> Assets:US:Hooli:EsppFund -850 USD
> Assets:US:Etrade:Hooli:Espp 10 HOOL {85 USD}
>
> 2020-07-01 * "ESPP Sell"
> Assets:US:Etrade:Hooli:Espp -10 HOOL {85 USD} @120 USD
> Assets:US:Etrade:Brokerage 1200 USD
> Income:US:Stocks:Gain -200 USD ; Long-term gain
> Income:US:Hooli:Salary -150 USD ; Espp income
>
> * Discount income tax is postponed to day of sale. Even though the income
> is earned in 2019, it is only taxable in 2020. How to account for this?
>
Do you mean that you want to recognize the discount in 2019 and the capital
gain in 2020?
You would do it by recognizing the discount as income in 2019 (it'll be
taxed as income IINM) and hold the asset at FMV instead of discounted rate:
2019-06-30 * "ESPP buy"
Assets:US:Hooli:EsppFund -850 USD
Assets:US:Etrade:Hooli:Espp 10 HOOL {100 USD}
Income:US:Hooli:Salary -150 USD ; Espp income
2020-07-01 * "ESPP Sell"
Assets:US:Etrade:Hooli:Espp -10 HOOL {100 USD} @120 USD
Assets:US:Etrade:Brokerage 1200 USD
Income:US:Stocks:Gain -200 USD ; Long-term gain
> * Qualifying and Disqualifying dispositions - Based on the holding period,
> the difference between grand-date FMV and vest-date FMV is taxed
> differently. How to account for / track this?
>
You can use a synthetic currency to hold your granted shares, such as
HOOL.UNVESTED at price 0 USD (you don't want unvested to show up on your
balance sheet) and when it vests you can deduct the corresponding granted
unvested units.
>
> Any insights would be helpful.
>
> - Michael
>
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