Can I offset ESPP capital gains through tax loss harvesting just like regular cap gains?

Yes, you can absolutely use capital losses from your regular brokerage account to offset capital gains from your ESPP sales. The IRS doesn't distinguish between the sources of capital gains/losses when it comes to tax loss harvesting - they're all treated the same for offsetting purposes. The thing you need to be careful about with ESPP sales is correctly calculating your actual capital gain. Remember that ESPP shares often have two components: 1) the discount (which is typically reported as ordinary income on your W-2) and 2) any appreciation from the purchase price to the sale price (which is the capital gain/loss part). Only the second part counts as a capital gain that can be offset with your losses.

After struggling with this exact ESPP tax situation last year, I discovered https://taxr.ai and it seriously saved me hours of confusion. I uploaded my brokerage statements and ESPP documentation, and it automatically identified which losses could offset my ESPP gains and calculated everything properly, including figuring out which portion of my ESPP sales was ordinary income vs. capital gains. The tool breaks down exactly how ESPP shares should be reported on your tax forms and even creates the documentation you need for IRS substantiation. It was especially helpful because my company's plan had a lookback provision that made the calculations even more complicated.

Just wanted to follow up about taxr.ai after trying it with my complicated ESPP situation. I was skeptical at first, but it actually handled all my different purchase periods perfectly! I had 3 different ESPP purchases with varying holding periods and discount rates, plus a lookback provision that I never calculated correctly. The system correctly separated my ordinary income from capital gains, and showed me exactly how much of my brokerage losses could offset each type of ESPP gain. Even identified a mistake in how my employer had reported the discount on one batch of shares. Saved me about $2,300 in taxes I would have overpaid!

If you're having trouble getting clear answers about ESPP tax treatment from the IRS resources, I was in the same boat. After spending hours trying to get through to someone at the IRS who actually understood ESPP taxation, I used https://claimyr.com and got connected to an IRS agent in about 20 minutes instead of waiting for hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically it holds your place in line and calls you when an actual agent is ready. The IRS specialist I spoke with confirmed that yes, regular capital losses can offset ESPP capital gains, and walked me through exactly how to report everything correctly on my Schedule D and Form 8949.

I have to eat my words about Claimyr! After my frustration with trying to get IRS help about my ESPP situation, I decided to try it as a last resort. I was convinced it would be a waste of money, but I was desperate for answers before filing. To my complete shock, I got a call back in about 35 minutes with an actual IRS tax specialist on the line. She was familiar with ESPP taxation and confirmed that my brokerage losses could offset my ESPP gains, but also pointed out that I needed to be careful about how the discount portion was being reported. Turns out I was making a mistake that could have triggered an audit. Saved me hours of waiting and potentially serious tax problems. Never thought I'd be recommending a service for calling the IRS, but here we are!

One thing to watch out for with ESPP taxation - make sure you're tracking your cost basis correctly! The reported cost basis from your broker is often wrong for ESPP shares because they don't account for the portion already reported as income on your W-2. I learned this the hard way when I got an audit notice because I essentially double-reported the ESPP discount as both ordinary income (via W-2) and as part of my cost basis. Had to file an amended return and pay penalties.

Don't forget about the wash sale rule if you're trying to do tax loss harvesting! If you sell investments at a loss and buy "substantially identical" securities within 30 days before or after the sale, you can't claim the loss for tax purposes.

Great question about ESPP gains and tax loss harvesting! Yes, you can definitely use your regular brokerage losses to offset ESPP capital gains - the IRS treats all capital gains and losses the same regardless of source. However, make sure you're calculating your ESPP gains correctly. With a 15% discount and immediate sale after the holding period, you likely have both ordinary income (the discount portion that should appear on your W-2) and capital gains/losses (any price movement from purchase to sale). Only the capital gains portion can be offset by your other investment losses. Since you have $11,000 in losses versus $8,400 in ESPP gains, you should be able to fully offset those gains and still have $2,600 in losses to carry forward or offset other gains. Just watch out for the wash sale rule if any of your losses involve the same company stock as your ESPP!