Brief intro: I work for a Canadian company that is 100% owned subsidiary of a US company. I am a Canadian resident and a US Citizen.
I’ve read that ESPP employee discount is treated as ordinary income and is included in box 1 of T4 which is taxable in the year that the stocks were purchased…even if they were not sold. How does one treat this income in the US tax return for the same tax year? As a credit…FEIE?
What happens when the stocks are sold [assuming it is a qualified disposition]? Do we then include the ordinary income in our Canadian tax return [again] on the year they were sold and in our US tax return? Wouldn’t this result in double taxation? Is there a tax form that I need to file in Canada to offset/credit this income…is there such a thing?
ESPP employee discount – US Canada tax reporting
Moderator: Mark T Serbinski CA CPA