Personal Finance & Money Asked by Vishnu Vardhan on October 24, 2020
Do i have to pay capital gains tax if i sell ESPP stock from ESPP account and bought same stock from individual broker account?
Here is an example:
I have 100 shares of ESPP stock allocated at 50$ in 2019 October
I sell those 100 shares from ESPP account for 80$ in 2020 June and i re-purchase same stock from my Individual broker account for 80$ on same day (or) some other day in 2020.
I wont sell these shares again in 2020. In this case i have same number of shares by 2020 end also. Since i was allocated for 50$ and sold for 80$, then it looks like profit 100X(80$-50$)=3000$. Do i need to pay tax for that 3000$ or there is no need to report since i have same amount of shares and same stock?
Please advise, Thanks in advance!
Yes, you will owe capital gains tax. Even if you sold and then re-purchased the shares within the same account, the answer would be the same. The only reason capital gains are not taxable is if they occur within a tax-advantaged account like a 401(k) or IRA. Additionally, there is something called a wash sale that prevents you from realizing a capital loss if you repurchase substantially identical shares within +/- 30 days of the sale. But neither of these apply to you.
Answered by Craig W on October 24, 2020
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