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stuchainz92 OP t1_iuj4vzo wrote

Reply to comment by alexm2816 in Any downsides to employee stock purchase plans? by stuchainz92

Not seeing a holding requirement, just that there are tax implications to selling! It sounds like I can enroll then just sell via Fidelity when the purchase goes through in February. Nice!

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Dorkus_Mallorkus t1_iuj5v1k wrote

Double check that. I've never seen a company stock scheme that didn't have a holding requirement. Otherwise you can just buy as much as possible at the discounted rate and then sell right away and make bank. My company has a 2-year hold requirement in order to get the discount/match.

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stuchainz92 OP t1_iuj6bh5 wrote

You’re right—I may have misunderstood the language. The only mention of a holding period says: the tax consequences to you depend on whether or not you meet the special holding period requirements: two years from the start of the offering and one year from purchase.

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meamemg t1_iuj6nz7 wrote

In addition to taxes, most have restrictions saying you can't sell right away (or that you lose the discount if you do). I'd triple check your documents and make sure there isn't that in there somewhere.

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Krynthose t1_iujiz7q wrote

There are many plans that allow you to sell right away. It's not unusual but yours is referring to a DD disqualifying disposition which makes you lose the tax favorability if sold before the respective dates.

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drphungky t1_iuj7w9n wrote

Holding requirements are common but by no means ubiquitous. My last company did not have one. Granted the purchases were done quarterly and I don't know how the money is held in escrow for the three months leading up to the purchase date (presumably they benefitted somehow), but once the purchase clears you were free to sell immediately. The discount was garbage there though, but free money is free money.

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Krynthose t1_iujipmm wrote

There are a lot of them that don't have sale restrictions, but if it's a qualified plan selling it immediately is a disqualifying disposition and takes the tax favorability away.

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