Tax Center

NEW! Need a financial, tax, or legal advisor?
Search AdvisorFind from myStockOptions.com

Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.

Tax Center › Section 83(b)

Test your knowledge with our Tax Returns quiz and interactive answer key!

Test your knowledge with our Taxes quiz and interactive answer key!

Want to know more? Listen to our podcast on tax return tips and how to avoid reporting mistakes!

Check out our podcast and video on the tax forms and reporting rules for stock sales.

Articles

Decisions At Grant With Restricted Stock (Part 2): The 83(b) Election Risks

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.

Early-Exercise ISOs Complicated By Final IRS Regulations

Michael Frank

Featuring reverse vesting, early-exercise stock options are usually granted only by pre-IPO companies. The IRS regulations on ISOs increase risk in early-exercise options, making it crucial that you understand the tax treatment.

FAQs

Why, when, and how would I make a 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...

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...

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

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...

Show More FAQs (7 more)

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

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...

Do I need to attach my Section 83(b) election to my tax return?

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 I exercise my options before they are vested and make a timely Section 83(b) election to be taxed on the spread at that point?

Generally, stock options are exercisable only when they vest. However, some pre-IPO companies grant options that...

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?

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

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?

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

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 Can it be rescinded?

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

Is a Section 83(b) election that taxes you on the value of the stock option spread at early exercise (vesting required for resale) ever revocable or rescinded?

The Section 83(b) election is irrevocable unless you show a...