On Sun, May 24, 2020 at 12:12 PM Michael Jaison <[email protected]>
wrote:
> Thank you Martin for your answers.
>
> * 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
>>
>
> Yes, I want to recognize the discount as income (because it is taxed as
> income), and remaining gain as capital gain.
> But, the income will be only taxed in the year when it is sold.
>
Are you sure? This seems unusual.
> If it is recognized as income here, then it will show in 2019 income
> sheet. How to handle this?
>
What's wrong with the original method you proposed? It recognizes both
incomes in the year of sale, which IIUC is that you want.
I suppose one thing I don't like about it is that the cost basis is
incorrect.
As an alternative, you could modify what I proposed to put hold the
instrument at a cost of 100 USD and place the 150 USD in a transfer account
(e.g., an Assets account), and debit from it when in the year you sell.
It'll be a bit manual to trace down the amounts, but if you don't have a
ton of them, that's probably manageable. If you have a lot, you could use
labels on your cost specs and write a script that will dig back in time the
original vesting event to figure out the amount for you at the time of
selling.
> * 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.
>>
>>>
>>>
> After the vest date, all the shares are vested and sellable. But the
> purchase price is lower of FMV of grant-date ($100) and vest-date ($120).
> So in this case, you were able to buy at $100 when the current market price
> is $120. This difference has to be tracked differently because this
> difference is taxed as qualifying or disqualifying dispositions based on
> the sale date.
>
That's something you'll enter manually. You could have two separate
accounts, one for long-term gains and one for short-term gains.
Personally I prefer to put that in my scripts that do reporting, there's a
lot of custom code in there, it figures out which ones were short-term and
long-term, e.g..
https://github.com/beancount/beancount/blob/master/experiments/washsales/list-wash-sales.py
I haven't generalized these things to all possible situations yet so
there's a lot of stuff like that which lives in experiments/
>
> Thanks in advance.
>
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