Hold SPP shares for at least two years after offer date and one year after purchase date to avoid a disqualifying disposition.
Hold RSU shares for at least one year.
Phrasing above is fast/lose heuristic, not precise. here are more details for the SPP component.
Details:
https://turbotax.intuit.com/tax-tips/investments-and-taxes/employee-stock-purchase-plans/L8NgMFpFX#:~:text=In%20this%20situation%2C%20you%20sell%20your%20ESPP%20shares%20more%20than,years%20after%20the%20offering%20date.&text=This%20is%20a%20disqualifying%20disposition%20because%20you%20sold%20the%20stock,the%20offering%20(grant)%20date.&text=You%20must%20show%20the%20sale,on%20your%202020%20Schedule%20D.
Summary from link above (TODO: more details on the RSU section):
How much of the stock sale price is compensation and how much is capital gain?
That depends on whether your stock sale is a qualifying disposition or a disqualifying disposition.
Disqualifying disposition:
You sold the stock within two years after the offering date or one year or less from the exercise (purchase date).
- In this case, your employer will report the bargain element as compensation on your Form W-2, so you will have to pay taxes on that amount as ordinary income.
- The bargain element is the difference between the exercise price and the market price on the exercise date.
- Any additional profit is considered capital gain (short-term or long-term depending on how long you held the shares) and should be reported on Schedule D.
Qualifying disposition:
You sold the stock at least two years after the offering (grant date) and at least one year after the exercise (purchase date).
- If so, a portion of the profit (the “bargain element”) is considered compensation income (taxed at regular rates) on your Form 1040.
- Any additional profit is considered long-term capital gain (which is be taxed at lower rates than compensation income) and should be reported on Schedule D, Capital Gains and Losses.
