Disqualified/qualified ESPP sale (or dispositions)

A qualifying disposition of employee stock purchase plan shares occurs if you sell your stock at least 2 years from the offering date and 1 year from the purchase date. Qualifying dispositions lead to preferential tax treatment and may allow for some portion of the gain to be taxed at long-term capital gains rates. A disqualifying sale of ESPP stock is anything that does not meet the qualifying standard. Gains from a disqualifying sale are often subject to various, higher tax rates.