Convert ESPP to "regular" stock

David Hurlburt

I want to transfer the stock I bought as ESPP to another brokerage account (years after the purchase so they should be "regular" versions and not disqualified or anything like that. I don't want to transfer them as ESPP tagged elements to the other brokerage. I would have thought Quicken would automagically convert these to non-ESPP variants after 1 or 2 years, but I guess that's not how it works and I don't understand the difference between ESPP versions and regular versions other than I'm supposed to hold on to them for some grace period. Any suggestions on the exact steps I can take to make sure this is tracked correctly within Quicken?

Tom Young

The stock never looses it's "ESPP" aspects.  When you sell them there's still a possibility that you will need to recognize "compensation" and adjust the basis of the stock accordingly.  Given that you've held the stock for many years any sales of this stock will be Qualifying Dispositions.

I've never had stock acquired via an ESPP so I'm not familiar with what Quicken does here but, yep, they are still "ESPP" shares.

mshiggins

Quicken maintains the stock's ESPP status and tax treatment for both disqualifying dispositions (shares held less than 2 years from grant date) and qualifying dispositions (shares held more than 2 years since grant date). 

ESPP handling was the feature that convinced me to switch my financial management from spreadsheets to Quicken 20 years ago. ESPP handling is one of Quicken's most rock solid features. 

David Hurlburt

Thanks, but this doesn't answer the question.

Chris_QPW

I just played with some long closed ESPP shares I had and from what I can see about the only thing you can do is enter a sell transaction, and then probably an add shares transaction in the other register.  And yes this is going to throw off the tax reporting, so what would probably do in this case make the sell in past year were it won't affect this years tax reporting.

Sherlock

     0.  Save a backup (press Ctrl + B).

1. Transfer all securities to the destination brokerage account: open the source account, select Enter Transactions, Shares Transferred Between Accounts from the Enter transaction: pull-down menu, choose All securities, select the destination account in the Transfer account: pull-down menu, and Enter/Done
2. Delete all the Removed action transactions added except for the ESSP security.
3. Delete all the Added action transactions added to the destination account except the ESPP security.
4. Replace the ESPP security in the Added action transactions in the destination account one at a time: left-click on the security field, enter/paste the security name, and press Enter

The trick to delete many transactions from an investment account is to use a customized Transaction report: select Reports > Banking > Transaction

mshiggins

David Hurlburt said:

Thanks, but this doesn't answer the question.

Quicken does not have functionality to convert an ESPP to a regular stock because that is not typically a valid scenario. An ESPP is always an ESPP no matter how long you hold it. 

The only time that would not apply is if the ESPP is transferred to someone else like an UGMA or an inheritance. In that case, you would remove the ESPP shares, make the cost basis adjustment for any ordinary income, then add the regular shares with the adjusted cost basis. The original shareholder or their estate is still responsible for recognizing the ordinary income on the transferred ESPPs. 

q_lurker

@Sherlock
Why the All Securities selection on the Shares Transferred?  I would think one could select the one -ESPP security, specify all shares of that security and avoid your steps 2 and 3.  Am I missing something?  

mshiggins

q_lurker said:

@Sherlock
Why the All Securities selection on the Shares Transferred?  I would think one could select the one -ESPP security, specify all shares of that security and avoid your steps 2 and 3.  Am I missing something?  

The last time I tested it, it was not possible to transfer ESPPs. The only workaround I found was to do as Sherlock mentioned - transfer all shares and delete the unneeded Removes and Adds. 

Long long ago it was possible - maybe in the early 2000's? But the capability was either intentionally or unintentionally disabled by about 2011.