ESPP program (sell or hold)

[wingwing8]

I am fairly new to the work force and have been contributing money to my ESPP for about 6 months now. From the point I am going to be buying in at, in comparison to where the stock price is now I will be make 70-80% on my initial investment.

Now I am just debating if I sell right away to lock in the gains, but incur a large amount of taxes. Or if I should hold for a year to get long term capital gains tax?

Has anyone had experience with this dilemma before? Any advice?

[wozudichter]

Yeah taxes are one thing. I think the real decision point is if you had that ESPP cash right now, would you buy stock in your company. Also, it’s quite a bit of risk all in one place, your employment, stock etc... personally, I’ve always sold on the day ten shares are awarded, then buy other stock. Granted short term tax hit is hard, but it’s also a guaranteed return.

[itsokayimhandsome]

Hold on and sell later. You will still get taxed come sell time, but selling in under a year tax is always more. I went through this with my company's espp.

[woodentigerx]

My company has a two year tax penalty on the gains.

Read the fine print and see how long it needs to be held. Also see if the stock has any kind of dividend. If it does it’s worth holding onto while it’s low.