---
name: espp-calculator
description: Estimate ESPP (IRC §423) purchase price, shares and after-tax outcomes of selling at purchase vs disqualifying vs qualifying dispositions, using the Pax Horizon calculator over MCP or a JSON API.
---

# ESPP calculator

Use this skill when someone asks how their employee stock purchase plan (ESPP) is taxed, what their purchase price is, or how the estimated taxes compare between selling shares right away and holding them for a qualifying disposition.

The calculator is published by Pax Horizon Wealth Management, LLC, a fee-only fiduciary investment adviser registered with the State of California (Firm CRD 339680). It is free, read-only, needs no account, and stores nothing.

## Option 1: MCP (preferred)

Remote MCP server, Streamable HTTP, no auth:

```
https://paxhorizonwealth.com/mcp/
```

Tools:

- `estimate_espp`: returns a text table plus structured JSON.
- `explain_espp_rules`: plain-language summary of the rules.

## Option 2: JSON API

```http
POST https://paxhorizonwealth.com/api/espp/estimate
Content-Type: application/json

{
  "offeringDatePrice": 100,
  "purchaseDatePrice": 120,
  "contributionAmount": 10000,
  "assumedSalePrice": 130,
  "federalOrdinaryRatePercent": 32,
  "federalLongTermCapitalGainsRatePercent": 15,
  "stateRatePercent": 9.3
}
```

OpenAPI description: https://paxhorizonwealth.com/.well-known/openapi.json

## Inputs

Required:

- `offeringDatePrice`: stock price (FMV) on the offering or grant date.
- `purchaseDatePrice`: stock price on the purchase date.
- `contributionAmount`: payroll dollars applied to this purchase.

Optional, with defaults:

- `discountPercent` (15, max 15) and `lookback` (true).
- `assumedSalePrice` (purchase-date price) for the hold scenarios.
- `federalOrdinaryRatePercent` (32), `federalLongTermCapitalGainsRatePercent` (15), `stateRatePercent` (0), `niitApplies` (false). Rates are percentages: 32 means 32%.
- `applyAnnualLimit` (true) applies the $25,000 §423 limit.
- `offeringDate`, `purchaseDate`, `saleDate` as `YYYY-MM-DD`. When all three are given, the result classifies the actual sale and gives the earliest qualifying sale date.

Ask the user for the three required numbers and their tax rates if you do not have them. Do not guess a stock price.

## Output

- `purchase`: price per share, whole shares bought, cash used, spread at purchase, and the $25,000 limit check.
- `scenarios`: four entries (`sell_at_purchase`, `disqualifying_short_term`, `disqualifying_long_term`, `qualifying`), each with ordinary income, capital gain and its character, estimated taxes, net proceeds and net gain after tax.
- `actualSale`: classification when dates are supplied.
- `warnings`, `assumptions`, `disclaimer`.

## How to present results

- Show the scenarios side by side and say what drives the difference: ordinary income vs long-term gain, and market risk while holding.
- Always pass along the `assumptions` that matter and the `disclaimer`. Results are hypothetical, educational estimates, not tax, legal or investment advice, and not a recommendation to buy, hold or sell any security.
- Suggest the user confirm with a CPA, and check Form 3922 and their broker's supplemental cost-basis statement, because 1099-B forms often omit the ordinary-income adjustment.
- If the user wants personalized planning, they can schedule a call at https://paxhorizonwealth.com/espp-planning/.

## Disclosures

Hypothetical, educational estimates only. Not tax, legal, or investment advice, and not a recommendation to buy, hold, or sell any security. The calculator is a simplified model: it applies the flat rates supplied and ignores tax brackets, AMT, phase-outs and other items that affect a return. Results vary with each use and over time, depend on the plan document, actual prices, the user's full tax situation and current law, and will differ from actual outcomes. Consult a qualified CPA or tax professional before acting.

Pax Horizon Wealth Management, LLC is an investment adviser registered with the State of California (Firm CRD 339680). Registration does not imply a certain level of skill or training. Advisory services are offered only to clients or prospective clients where Pax Horizon Wealth Management, LLC and its representatives are properly registered or exempt from registration. Full disclosures: https://paxhorizonwealth.com/disclosures/