What tax advantage do employee stock purchase plans provide to full-time employees?

Employee stock purchase plans (ESPPs) primarily offer a tax advantage by allowing employees to buy employer stock at a discount. This discount can often be as much as 15%, which provides a direct financial benefit to employees. When employees acquire stock at a lower price than its market value, this not only incentivizes them to invest in the company's success but also serves as a reward for their contributions.

The ability to purchase stock at a discount is significant because it means that employees gain immediate value upon purchasing the stock, enhancing their investment potential. The discount often leads to increased employee satisfaction and retention, as they have a vested interest in the company’s performance. Furthermore, if employees hold the stock for a designated period, they might benefit from favorable tax treatment on the gains.

While other choices contain elements related to employee stock plans, they do not capture the essence of the primary tax advantage associated with ESPPs. For example, purchasing stock at market price does not provide the same financial incentive, and receiving stock options or selling stock without tax implications refers to different mechanisms that don't directly represent the core benefit linked to ESPPs. Thus, the ability to buy employer stock at a discount stands out as the key advantage.