This question is regarding being taxed twice under an employee stock purchase plan. The company allows us to buy a set amount of stock at a discounted price, in this case $30.81 x 164 shares. That brings the purchase price to $5052 and the proceeds from the sale showing on the
1099-B are $7391. But when I purchased the stock, I then had been taxed on the difference between the market price the day I paid for it ($45), amounting to payroll deductions over $800 . I then sold it for the near the same price ($45).The way my taxes have been filed the past 8 years on my Capital Gains and Losses form is by putting the first amount ($5052) the price I actually paid for the stock in the cost basis column. Thus showing that I made close to $2400 on the sale of the stock.
My question is, why did I get taxed initially from the company through payroll deduction for the $800 on the total taxable income amount (Market value at the time I bought it - purchase price= $2400), and then had this added to my total earnings for the year, thus getting taxed once again. From the statement on the company tax info I was sent after buying the stock (below) it says it will already by added into my yearly earnings, known as a w-2. So, it should already be in there, not added again.
This was on the paperwork I received from the company (my comments are in parenthesis):
The difference between the sale price under the ESPP ($30.81) and the market price when elected to receive is subject to additional compensation to the employee and subject to income and SS taxes. The difference between the exact market value (either $45.56 the market price the day I purchased it from the company, or the $45.0725, the price I sold it for through a broker, both similar but I assume the first because payroll wouldn't know what I sold it for), will be included on your final statement of income and final tax withheld at the end of the year, known as your W-2, which will be delivered to you at the end of the year.
My co-worker's CPA has been filing her stock purchase capital gain/ loss form as the price it was when you bought it (market value in my case, $45 X 164) and was already taxed on, in the cost basis column, the price she sold it for in the "sold it for" column. In my case, it actually came to a loss of $80. But it was filed as a gain of $2400, as if I never paid any taxes on it at all?
Who is right? I am lost. I need help please!!!