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Restricted Stock: Section 83(b)

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Articles (Jump to FAQs)

Decisions At Grant With Restricted Stock (Part 2): The 83(b) Election RisksThis is premium content

Tom Davison
UPDATED! Part 1 examined the basic facts of restricted stock and the decisions you need to make at grant. Part 2 explains the risks of the 83(b) election, which lets you choose to be taxed at grant rather than vesting.

Decisions At Grant With Restricted Stock (Part 3): Analyze Your AlternativesThis is premium content

Tom Davison
Now that you understand the risks of choosing to be taxed at grant with a Section 83(b) election, should you do it? Part 3 takes you through the analysis.

Foreign Executives Transferring To The United States: Tax-Planning Strategies For Equity CompensationThis is premium content

Michael Melbinger
Some significant tax and estate-planning opportunities—and traps—exist for foreign executives who come to the United States to work (and when they leave too). This article outlines the principal areas of concern.

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FAQs (Jump to articles)

How do I make a timely and complete Section 83(b) election?

Named for the Internal Revenue Code section that authorizes it, this election is made only (1) when you want to be taxed on the value of restricted stock at grant rather than vesting or (2) when you exercise options that are...

Should I make a Section 83(b) election for my restricted stock grant?This is premium content

Before you even analyze the decision, you should learn the basic facts and risks of the Section 83(b) election. Once you understand it, the election can make sense in certain circumstances, including...

Is a Section 83(b) election taxing you on the value of restricted stock at grant ever revocable? Can it be rescinded?This is premium content

The IRS has provided guidance on the limited circumstances in which this is permitted. The Section 83(b) election is irrevocable unless you...

My restricted stock never vested because I left my company, but I paid taxes on the stock at the time of grant. Can I recover the taxes that I paid with the 83(b) election or claim some other deduction?This is premium content

When you forfeit the stock, you are allowed a limited capital loss deduction for any amount you paid...

Can I make a Section 83(b) election for just part of my restricted stock grant?This is premium content

Yes, according to most experts. There is nothing in Section 83 of the Internal Revenue Code that states or implies that a grant of restricted stock is a single piece of property...

With restricted stock units (RSUs), can I make a Section 83(b) election to be taxed at grant instead of share delivery?This is premium content

Restricted stock follows the tax rules under Section 83 of the Internal Revenue Code, while RSUs are taxed under Section 451 upon the actual or constructive receipt of the shares...

Can my company help me file my Section 83(b) election?

A survey in 2013 by the National Association of Stock Plan Professionals found that...

UPDATES! Do I need to attach my Section 83(b) election to my tax return?This is premium content

Until recently, after making a Section 83(b) election, you had to attach a copy of the election to your tax return. In 2015, the IRS and the Treasury proposed an amendment to...

Can my company discourage or even prohibit me from making a Section 83(b) election on my restricted stock grant?This is premium content

Your company can make it a condition of accepting the grant that you agree not to make this election. It may do this because it feels...

If I make a Section 83(b) election to be taxed on the value of my restricted stock at grant, can I pay the taxes by selling shares or by having my company withhold shares or lend me money?This is premium content

At the time of grant, your shares have not vested. Thus you cannot sell them, and your company cannot withhold shares. The possibility of a loan from the company depends on...

By the time my restricted stock vested the price had dropped from the market price at grant. But I elected to pay taxes on the stock value at the time of grant. Can I recover the taxes that I paid with the Section 83(b) election?This is premium content

No. You were optimistic that the stock price would rise. This is the risk...

NEW! Is a Section 83(b) election ever required for grants of stock or options in privately held companies?

A Section 83(b) election is applicable when a substantial risk of forfeiture exists in the underlying shares of an equity grant. In privately held companies, an 83(b) election is made upon...

I have founder's stock that has become subject to forfeiture and transfer restrictions required by new investors. Does my stock become taxable to me, or do I need to make a Section 83(b) election?This is premium content

The imposition of forfeiture, transfer, and buyback restrictions on you when a new investor acquires stock...

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