Tracking an ESPP Stock In Quicken

David Green

I have an account with a brokerage that does not support downloading from Quicken. I purchase stock through an employee purchase plan. My statement shows shares of common stock, and shares purchased via EPP. I created the account today in Quicken. I entered the # of shares of common stock and the # of shares of EPP stock from the statement. I used the same stock symbol for both. After creating the account the balance is off. Quicken thinks that the total # of shares (common stock + EPP stock) is the same as the # of shares of EPP. It added 2 transactions to the register, one for the # of shares of common stock and another for the EPP stock less the # of common stock shares. Is there a way to track the shares separately?

Chris_QPW

Did you use the "Bought ESPP Shares" action/Wizard for buying your ESPP shares?
It will create a different security "Company Name ESPP" for the new shares.

David Green

No. I opened the account and then added the current # of shares for each type. I will look into doing that. thanks.

Jim_Harman

Are the common and EPP holdings set up as separate securities in Quicken, i.e. with different names?

What is the difference between the common stock and the EPP stock? Are they priced the same for example? Is the EPP stock restricted so you can't sell it right away?

David Green

I set them up as different names with the same ticker symbol in the account in Quicken. The EPP stock is purchased at a reduced price. The EPP stock is not restricted. I did find this link that implies I should have separate accounts for each stock type: https://www.quicken.com/support/how-do-i-add-account-track-employee-stock-purchase-plan-espp-shares

Chris_QPW

I will say that even though I didn't see any restrictions in using the "Bought ESPP Shares" action/wizard back when I had ESPP I did do it in a separate account.

mshiggins

I have used both methods in the past - tracking ESPPs in their own account and tracking ESPPs in the same account as the regular stock.

I would model the tracking method in Quicken on how the FI structures the accounts.

Etrade had separate accounts so tracked separately in Quicken when I had ESPPs there. Now with Fidelity, the stock from all sources (purchased RSUs, ESPPs, dividend reinvestment) is in one account, so tracking in one account in Quicken 

David Green

> @mshiggins said:
> I have used both methods in the past - tracking ESPPs in their own account and tracking ESPPs in the same account as the regular stock.
>
> I would model the tracking method in Quicken on how the FI structures the accounts.
>
> Etrade had separate accounts so tracked separately in Quicken when I had ESPPs there. Now with Fidelity, the stock from all sources (purchased RSUs, ESPPs, dividend reinvestment) is in one account, so tracking in one account in Quicken 

How are you tracking this all in one account? This is how my FI is doing it - common shares, ESPPs and dividend reinvestment in the same account.

Sherlock

We have ESPP and common shares with dividends combined in one account from one financial institution and dividends separated in another.  In all cases, the dividend is associated with the common security not the ESPP.  

If we wanted to track their income separately, we would need to associate the ESPP security with a distinct common security that we didn't actually hold. 

Tom Young

Employer stock acquired in the open market and employer stock acquired via an ESPP can have can are treated differently for income tax purposes upon the sale of the stock, so it behooves you to make the distinction between the two.

Quicken says it understands the tax peculiarities of stock acquired via an ESPP

https://help.quicken.com/display/WIN/Tell+me+about+tax+terms+for+ESPP+(employee+stock+purchase+plan)+shares

(I've never had ESPP stock so I'm not vouching for Quicken's accuracy here) so creating a Quicken Account for ESPP grants and purchases does have a benefit, tax-wise.  Having been designated (in Quicken) as a stock acquired via an ESPP my guess is that it's irrelevant from Quicken's standpoint as to which Account (in Quicken) holds the stock.

Given this I'd echo the advise above to structure you Quicken Accounts in the same manner and fashion as they exist in the real world.  If all the stock ends up in one account at your brokerage then mimic that, even if you haven't tracked the grants and purchases through a separate "Employer ESPP Stock" Account in Quicken.  Just remember that stock that you sell that's titled "Employer-ESPP" will have to be handled differently - maybe - at tax time.

Chris_QPW

Tom Young said:

 "Employer-ESPP" will have to be handled differently - maybe - at tax time.

For reference here is what the ESPP buy wizard dialog looks like:


And just so you know, yes, they are treated differently during tax time.  It is because of the ESPP Discount Rate.  Since you aren't buying your shares at the market value there are different tax ramifications.

And you have to use the Sold ESPP Shares action/wizard to sell.  And it is going to only allow you to select from the security that was setup in the buy.





When I used it way back when I found it to be quite accurate, but when it really came down to it I believe I just used the numbers on my W-2 (or maybe that was my ESOs, it has been too long to remember).

David Green

thanks for the advice. I have learned a lot here and through reading. I am still unsure how to get to my goal, which is to track the two classes of stock in the same account. I think I need to add the common stock as opening the account, and then do a 'buy' of the EPP stock so that quicken treats them differently. correct?

mshiggins

David Green said:

thanks for the advice. I have learned a lot here and through reading. I am still unsure how to get to my goal, which is to track the two classes of stock in the same account. I think I need to add the common stock as opening the account, and then do a 'buy' of the EPP stock so that quicken treats them differently. correct?

If the security for the common stock already exists in your Quicken file, your first ESPP buy with the wizard will create the ESPP security. 

Sherlock

David Green said:

thanks for the advice. I have learned a lot here and through reading. I am still unsure how to get to my goal, which is to track the two classes of stock in the same account. I think I need to add the common stock as opening the account, and then do a 'buy' of the EPP stock so that quicken treats them differently. correct?

If you add an ESPP security (press Ctrl + Y and select Add Security), Quicken will prompt for an account and the common security to associate with the ESPP security.   You'll be able to choose the security in the Bought ESPP Shares wizard (open an investment account, press Ctrl + N, select Bought ESPP Shares).

David Green

thanks. I will do it that way

David Green

Ok another question... I read through this page here: https://help.quicken.com/pages/viewpage.action?pageId=3216638. My company has offerings twice a year, the current one opened in July and closes in December. However each purchase is done with the discount applied to whatever the market value is at time of purchase. We purchase each pay period. As part of entering the transaction Quicken wants the fair market price at offering close, which will be in December. I have no idea what that will be. Do I need to wait until the current offering closes to enter the transaction?

Tom Young

I find this statement confusing: " We purchase each pay period."

What typically happens with an ESPP is that during the 6-month period between the grant date and the purchase date you have deductions taken from each paycheck.  These deductions accumulate until the actual "purchase date" at the end of the 6-month period.  The accumulated cash is then used to make the purchase, at a discount.

So I'm assuming that you misspoke here and really mean "ESPP deductions occur each pay period." 

If that's the case, then when you do your accounting for each paycheck the ESPP deduction is treated as a transfer of cash into whatever Account you're using to accumulate that cash.  When the actual purchase date arrives and that cash is used to make the purchase, at a discount, that's the point where you tell Quicken what the stock's fair market value was at the purchase date.

David Green

If I look at the statement and also the online history, I see purchases every pay period. I see FMV listed for each purchase. I am thinking my opening and closing date should then be the date of purchase and the FMV would be the value at the time of the transaction. For the initial 'purchase' to get all of the ESPP stock into Quicken I think I just need to use the FMV for the most recent purchase. I don't see a way to add the opening balance otherwise.

Tom Young

If indeed you are making actual purchases each paycheck then each purchase should have its own fair market value number and all of them would share, I presume, the same grant date.*  If you want to preserve the "ESPP" aspect of the stock accurately each purchase should be entered separately. 

When it comes time to sell the stock the elements of figuring out how the sale should be reported in your income tax return comes down to

1. Date of grant
2. Per share FMV at grant date
3. Date of purchase
   
4. Per share FMV at purchase date
5. Date of sale
6. Per share selling price
   

*As I recall, in some situations the actual purchase date can be considered the grant date, but the company is supposed to inform you of that.  You might want to double-check with your employer to see if that might not be the case here.

David Green

Thank you. That is the conclusion I came to as well.