Employee Stock Purchase Sale

[moemabel]

After tax payroll deductions were used to purchase company stock at a 15%discount. If the stock was sold before 6 months after purchase, the discount would be added to w-2 earnings with taxes taken out. This is what happened since we needed the funds. I just want to find out that when determining the capital gains tax on the sale, am I using the discounted purchase price or the original purchase price. I'm assuming the original purchase price since if I used the discounted purchase price, I would be double taxed?? Please assist with both Federal and PA state issues. Thanks!!

Name of State: PA

[LdiJ]

Originally Posted by moemabel

After tax payroll deductions were used to purchase company stock at a 15%discount. If the stock was sold before 6 months after purchase, the discount would be added to w-2 earnings with taxes taken out. This is what happened since we needed the funds. I just want to find out that when determining the capital gains tax on the sale, am I using the discounted purchase price or the original purchase price. I'm assuming the original purchase price since if I used the discounted purchase price, I would be double taxed?? Please assist with both Federal and PA state issues. Thanks!!

Name of State: PA

You would use the original purchase price. Not the discounted price.