ESPP cost basis on Investing tab isn't accurate

RedCab

I am expecting the "cost basis" of my ESPP purchased plan to be reported as the actual price paid for the ESPP shares - which is captured when I entered the transaction using the ESPP wizard.

Instead it is using the stock's price on either the start or end dates of the ESPP offering period. These prices are important for tax calculation (based on "qualifying holding period) but that's a turbotax consideration, not a Quicken one. Quicken should sidestep the potential tax treatment and just assign what I've actually paid for the shares. The tax calculation comes later. I just want to see the "gain" as mkt value today minus ACTUAL price paid.

(From what I can figure, Quicken is reporting gain/loss as the current "capital gain" and is silent on the "income" portion of ESPP share price increase. Interesting info, but at best incomplete and really the domain of Turbotax, not Quicken)

Why does Quicken see this differently?

THx!

mshiggins

ESPP cost basis in Quicken is the amount you paid plus ordinary income. It is the full tax impact based on qualifying vs. disqualifying disposition. Not everyone uses TurboTax, so personally I am glad Quicken does the full tax impact calculation.

Tom Young

Not that I've ever had an ESPP in real life, but in the past I've played around with the "wizard" and, if memory serves, it did correctly calculate cost basis as @mshiggins has said.

If you simply want shares purchased via an ESPP to always retain the price you paid then I'd think the best way to do that would to be to create a manual Account where you record those purchases using the correct name and ticker symbol, then do a transfer"of those shares over to your "live" brokerage Account, deleting anything that might be downloaded from the broker when those shares show up. That should allow you to see the (downloaded) market value as of today minus the actual price paid.

RedCab

@mshiggins When it adds the ordinary income portion to the actual cost to reach the "cost basis" it displays, it is obscuring the "full tax impact" you are looking for. How? By not displaying the amount that will also be subject to ordinary income.

Ideally I'd want to see the full breakout reported on the Investment/portfolio screen… the actual price paid, today's market price, today's market value, total gain from actual price paid, amount of that subject to ordinary income and amount subject to capital gains (based on qualifying holding periods). Any way to set that up on the Investments screen?

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mshiggins

@RedCab

The full tax impact is the long term capital gain taxed at capital gain rates and the ordinary income taxed at regular income rates. What you are proposing is to treat capital gain as if it will be taxed at regular tax rates. I am not sure why you would want to do that, but you might see if the $ Invested column in a Portfolio view gives you the figure you are looking for.