Qualified Employer Stock Purchase Plans
When you buy stock under an employee stock purchase plan (ESPP) the purchases are withheld from after-tax income. These instructions refer to employer stock purchases that qualify for the Capital Gain tax treatment, allowing you to account for the value of the shares and the capital gain tax liability on the sale of the stock.
Vested Shares
Navigate to to My Plan > Accounts and Assets
Add an Investment account.
Make sure to create a specific label such as "Ace Employee ESPP" so you can distinguish it from your 401(k).
Select the Capital Gains tax treatment (when you sell shares, gains/losses are taxed as capital gains.)
Enter the cost basis and update manually as needed.
Since ESPPs are invested in your company stock, you can set your rate of return on either:
An assumed equity return rate, or
Actual performance of your company’s stock (update periodically).
Future Shares
Navigate to to My Plan > Income
Add a job. Give the job a descriptive name, “ACE Employee,” for example.
Enter your gross income.
Add a contribution for the the net value you compute for the employee stock purchase plan (ESPP).
Future Sales
Navigate to to My Plan > Money Flows
If you want to account for Capital Gains tax on the sale of the stock at a later date, model a transfer to an after tax savings account with an Ordinary Income tax treatment on the date you plan to to sell the stock. This transaction will incur long term Capital Gains tax but further withdrawals from the savings account will not.
There is a small amount of ordinary income tax that isn’t accounted for with this method, but this is the closest method currently available.
Extra Shares
Navigate to My Plan > Income > Windfalls
Add a windfall
When asked "Which account do you want to model a contribution to?" select the "Ace Employee ESPP" account.