How do I report participation in an employee stock purchase plan on my tax return?
If you participated in an employee stock purchase plan, you do not include any amount in your gross income as a result of the grant or exercise of your option to purchase stock. When you sell the stock that you purchased by exercising the option, you may have to report compensation and capital gain or capital loss. For additional information on tax treatment and holding period requirements, refer to Publication 525, Taxable and Nontaxable Income. References: Publication 525, Taxable and Nontaxable Income.
