Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
Lucent ESPP Cost Basis
Posted by: edge, October 16, 2017 09:11PM
In 2001 and 2002 I purchased Lucent Stock through an ESPP at a 15% discount and need to determine the Lucent stock basis. The last of the stock (ALU to NOK) was sold 2016 and the rest divested through mergers in earlier years.

The W-2 from 2001 and 2002 do not show any ESPP withholding and the Lucent ESPP Documents state is this it is the employees responsibility to pay taxes, but they may withhold taxes if necessary.

How should I calculate the LU tax basis ? From the 15% discounted stock price paid?

Re: Lucent ESPP Cost Basis
Posted by: 47Percent, October 17, 2017 02:05AM


Sorry, I am not directly addressing your question..

but.. one way I solved a similar problem I had was to use the stash of stocks for my charitable giving.

That way, you don't have to worry about the cost basis and you get the full value of the deduction for donation -- provided it has appreciated.

Admittedly, the amount I had was just about the amount I would have given over a period of 5 or 6 years, and I moved that over to a Donor Advised Fund account and timed the deduction in a year when I could really use it.

Re: Lucent ESPP Cost Basis
Posted by: kaneohe, October 17, 2017 02:38PM
[www.sfchronicle.com]

This article may help. The impression I get is that the basis is the undiscounted stock price when bought.
The discount was shown as wages in the yr you sold, not when you bought them.

Re: Lucent ESPP Cost Basis
Posted by: jlehrer, October 18, 2017 01:34PM
Taxes on shares acquired via ESPP are due only at the time of disposition. There are no taxes on the discount at purchase time.

At sale time, some of the gains may be ordinary income and some may be capital gains (either short or long). Some of the ordinary income may be reported for you on your W2, some may not.

For a thorough explanation, read Kaye's articles starting here:

[fairmark.com]

-J



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