ESPP Basis Adjustment Calculator
Calculate your adjusted cost basis to avoid double taxation on ESPP shares
Critical: The #1 ESPP Tax Mistake
Your employer reports the ESPP discount as ordinary income on your W-2, but your broker reports the discounted purchase price as basis on Form 1099-B. Without adjustment, you'll pay tax twice on the same discount amount. This calculator shows you the correct adjusted basis to report on Form 8949.
ESPP Basis Adjustment Calculator
ESPP Sale Details
Enter your ESPP purchase and sale information from Form 3922 and Form 1099-B
Why Basis Adjustment is Critical
Understanding the double taxation trap and how to fix it
The Problem
When you sell ESPP shares, two different entities report different amounts:
- Your Employer (W-2): Reports the discount as ordinary income in Box 1
- Your Broker (1099-B): Reports the discounted purchase price as your cost basis
If you use the 1099-B basis without adjustment, you'll pay capital gains tax on the discount amount that was already taxed as ordinary income on your W-2.
The Solution
Adjust your cost basis on Form 8949 to include the W-2 ordinary income:
This ensures you only pay capital gains tax on the actual appreciation after the discount, not on the discount itself.