FAQs: Employee Stock Purchase Plan

1. The sale of stock that I purchased under my company’s employee stock purchase plan produced ordinary income.  How do I report that income?

Generally, the sale of stock would produce a capital gain or loss.  However, in some situations, the sale of stock acquired through an employee stock purchase plan may produce ordinary income as well.

In these cases, report the exact amount of ordinary income in the “Income Amount” field.  Describe the income in the “Income Type” field as “option exercise, ordinary income” and identify the stock by name.