How do I add an account to track employee stock purchase plan (ESPP) shares?


Many companies offer an employee incentive known as an Employee Stock Purchase Program (ESPP), which offers employees shares of the company's stock at a discount. If you participate in an ESPP, you can then sell the stock at market value. For tax purposes, a portion of the difference between the discounted price of the stock and its market value when you sell is considered to be a part of your salary, and a portion is considered to be capital gain, but the amounts of each depend on how long you hold the stock before selling. Consult your tax advisor and the information included on your subsequent W-2 form to determine which part is gain and which part is salary or ordinary income.

If you're recording ESPP transactions into a Quicken account that you've activated for online account services, keep in mind that your broker may track the discounted purchase price and its tax implications using different transaction types. It is preferable not to download ESPP transactions into Quicken.

Before purchase

  1. Add a separate investment account to track your ESPP stock shares.
  2. Set up your paycheck as a register transaction. In the paycheck setup window, under After Tax Deductions, click Add After-Tax Deduction, and then choose Stock Purchase (ESPP).
  3. In the future, when you enter each paycheck into the register, Quicken will transfer the amount of your ESPP contribution to your ESPP investment account.

At the time of purchase

Use the Enter Transaction dialogs to help you record the purchase of ESPP shares.

Notes

When you enter a buy transaction in Quicken, the purchase price is recorded in the security's price history. Because you purchase ESPP shares at below market price, the price history for this security will display an artificially low value for the date of purchase. If you want your price history to reflect the actual market value, be sure to edit the security's price history to reflect the actual market price on the purchase date.

When you sell ESPP shares

Use the Enter Transaction dialogs to help you record the sale transaction for ESPP shares.

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