Tracking ESPP Disposition in Paycheck

Arpit

I've been tracking my ESPP for years in quicken; each pay period the cash goes into an ESPP holding account, then i make the buy into that account for the shares when its time.

Recently i sold some shares and noticed an extra line item on my paycheck for "Qualifying ESPP Disposition" as 'earnings', I held these shares for over a year and recently sold them. My assumption is that the amount listed in earnings is the difference in my strike price and purchase price?

When i enter it as earnings it throws off my net. When I try to offset it as 'after tax deduction' it throws off my deductions and net. If I leave it off my paycheck register it throws off my gross.

My question is how do I enter this into my paycheck register so that it doesnt screw up all the numbers, i am leaning towards leaving it off my paycheck and deal with the difference in gross at tax time.

Frankx

Hi @Arpit,

I believe that it is likely that the amount shown as "Qualifying ESPP Disposition" could be the "discount" you received on the sold shares when they were purchased.  That amount is ordinary income on your tax return.  The difference between the purchase price and the sales price would be considered capital gains (not ordinary income AS LONG AS you held the shares sold for more than one year.  If not, that also would be income, but would be recorded as a short-term capital gain on your return.

It should be obvious (because of the amount) whether it is one or the other.

Frankx

mshiggins

In my paycheck advice there is the ordinary income entry from selling the ESPPs and an offsetting expense. If you have the ordinary income showing in Quicken tax reports already and there is no offsetting expense in the paycheck advice, I would omit the ordinary income entry from the paycheck advice. 

Frankx

Hi @Arpit,

I believe that it is likely that the amount shown as "Qualifying ESPP Disposition" could be the "discount" you received on the sold shares when they were purchased.  That amount is ordinary income on your tax return.  The difference between the purchase price and the sales price would be considered capital gains (not ordinary income AS LONG AS you held the shares sold for more than one year.  If not, that also would be income, but would be recorded as a short-term capital gain on your return.

It should be obvious (because of the amount) whether it is one or the other.

Frankx

Arpit

Thank you both @Frankx & @mshiggins

Hong

There is a bug in Buy ESPP and Sell ESPP, the bug was introduced mid to late July. I spent 6 hours on the phone with Quicken support. They told me that my file got corrupted, that I need to start a brand-new file and I will lose all my data. Today, I proved that it is not because of my data file, it is because of their new released. I brought the data file to my old laptop that has R33.24, Oh la, everything is working fine, I entered the June lot and bring it to the new laptop. Now we all need to convince Quicken that it is not all of us that has the data corrupted.