inDinero does not generally prepare 83(b) elections, please reach out to your account manager for our recommended providers. In the meantime, read-up on a basic overview on the topic below.
An 83(b) Election allows you to be taxed at the time you receive property, like restricted stock, as compensation instead of waiting for the property to become transferable or no longer subject to a substantial risk of forfeiture.
Here is a general overview of filing a Section 83(b) Election:
- You need to file an 83(b) election within 30 days after you receive the property.
- Send the original election form and cover letter to the Internal Revenue Service Center where you would otherwise file your tax return within 30 days after the date of grant.
a. The date that your letter is postmarked is considered the date filed.
b. Send the election via certified mail. Requesting a return receipt is also recommended.
- Provide a copy of the completed election form to the company issuing the stock to you for whom you are providing services. (The employer who issued the stock.)
- Attach a copy of the completed election form to your federal personal income tax return (Form 1040) for the calendar year in which you received the stock, when you file it the subsequent year.
- If applicable, attach a copy of the completed election form to your state personal income tax return for the calendar year in which you received the stock when you file it the subsequent year.
- Retain one copy of the completed election form for your personal permanent records and retain proof of mailing.
Our comments may not contain a full description of all the facts or a complete exposition and analysis of all relevant authorities. Furthermore, the use of certain words such as “should, would, or will” is merely for grammatical convenience, is not intended to indicate a specific level of authority regarding a particular issue, and no explicit or implicit references should be taken there from. Our comments expressed herein are based upon the provisions of the Internal Revenue Code and Regulations in force on the date hereof, all proposed amendments to these Acts, Regulations and treaties publicly announced by the relevant authorities. Each and all of these authorities are subject to change at any time. Any such change could be given retroactive effect with respect to the transactions described herein and could cause the conclusions provided to become invalid, in whole or in part, with respect to any entity involved. There can be no assurance that these authorities will not disagree with, or challenge, the views set forth in this memorandum or that any such challenge will be unsuccessful.