I wanted to check my work here and ask advice for what others have done/would do in this situation. My company does monthly purchases for those enrolled in the ESPP. Around pandemic the stock shot up in value and then came back down to earth. I have some lots of the stock that would be good targets for taking a loss, but due to the monthly purchasing in the ESPP, some would end up as washes. I see the following options:
- Wait until the next dividend, then pause ESPP contributions. Wait 30 days, sell, wait 30 days, restart ESPP contributions. Upside is there’s no wash sales to report and I understand why, downside is I miss a couple of months of ESPP matching.
- I have tax lots that are pretty close to the current value of the stock both before & after the inflated lots. I could sell some lots purchased before the inflated lots that match closely to the number of shares bought last month + expect to purchase this month (the wash sales). My understanding is that the wash sale would apply share-for-share against the earliest shares, so I could apply the small wash to the newly purchased shares, and realize the loss from the lots with a large per-share loss. Downside to this plan is not completely being sure of what I’m doing here, upside is that it would allow for me to stay in the ESPP and I’d probably reuse this strategy for sales in the future.
Thanks in advance for any advice, just curious how others in ESPP that are structured this way handle selling.
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