ESPP Qualifying Disposition Tax Split Calculator

Quantify the tax pieces triggered by a qualifying ESPP sale. Provide the purchase price, market value on the purchase date, and the sale price to see how much ordinary income is recognized, how much remains as capital gain or loss, and what the estimated tax bill looks like at your chosen rates.

Actual price paid after the ESPP discount.
Closing market price on the purchase date.
Average price received when you sold.
Leave blank to assume a single share.
Marginal rate applied to the compensation element.
Expected blended federal + state capital gains rate.

Illustrative only. Verify tax classifications with your payroll team and advisor before filing.

Examples

  • $85.00 purchase, $100.00 purchase FMV, $140.00 sale, 300 shares, 32% ordinary rate, 15% capital gains ⇒ Ordinary income taxed as compensation: $4,500.00 USD • Long-term capital gain: $12,000.00 USD • Total proceeds: $42,000.00 USD on a basis of $25,500.00 USD • Estimated tax using provided rates: $2,340.00 USD • Effective tax burden on proceeds: 5.57%
  • $72.00 purchase, $90.00 purchase FMV, $70.00 sale, 150 shares, default tax rates ⇒ Ordinary income taxed as compensation: $0.00 USD • Long-term capital loss: −$300.00 USD • Total proceeds: $10,500.00 USD on a basis of $10,800.00 USD • Estimated tax using provided rates: −$45.00 USD • Effective tax burden on proceeds: −0.43% • Sale produced an overall capital loss; no ordinary income applies.

FAQ

Does the calculator cover disqualifying dispositions?

No. Disqualifying sales recognize ordinary income up to the entire spread between the sale price and purchase price. Run a separate scenario tailored to those rules.

How should I include state taxes?

Blend your state marginal rates into the ordinary and capital gains percentages or run separate scenarios for federal and state obligations.

Can I use this for alternative minimum tax planning?

ESPP shares do not trigger AMT adjustments like incentive stock options. Use the results here alongside your broader tax projection to confirm withholding needs.

What if my employer withholds on the ordinary income?

Subtract the expected withholding from the estimated tax output to gauge any additional quarterly payments or reserves required.

Additional Information

  • Qualifying dispositions meet both the two-year offering and one-year holding periods, so the discount becomes ordinary wage income limited by the gain.
  • Ordinary income cannot exceed the discount between the purchase-date market value and what you paid, even if the sale price is much higher.
  • Capital gain or loss still uses the discounted purchase price as basis; losses can offset other capital gains subject to IRS rules.

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