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83b election

kenhoyt
Level 2

When I enter an 83b election, the income does not flow anywhere apparently.  There is a bargain element of course.  Anyone have advice or a workaround?  Thx

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itonewbie
Level 15

If the election was made on a timely basis, the employer should have already picked that up on the W-2.  Why would you need to include that in income again?

Also, the election was to have been made within 30 days of the transfer.  What did you enter for the election on the return?

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kenhoyt
Level 2

Thanks.  I saw your post from last year also.  I have a few a these from employees of the same privately-held company.  Grant date was 1/10/20 and 83b transfer date was 12/30/20.  Not reported on W2.  Seems like the 83b's are not legit due to 30-day window passing and I'm hesitant to sign these things.  Oh yeah, plus they are ISOs, not restricted stock.  In your opinion, are the 83b elections legit?  Thank you in advance.

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itonewbie
Level 15

When you say these were granted on 1/10/20 and transferred on 12/30/20, do you mean stocks that were no longer subject to substantial risk of forfeiture were transferred to your clients on 12/30/20?

Got a few issues here:

  1. This is a privately-held company, has the company done some sort of valuation for the stocks?
  2. If these are ISOs, §83(b) is not applicable.  Even if the employer's stocks have publicly traded options, those granted by employers are subject to vastly different terms and are not equivalent to publicly traded options.  Stock options granted as part of an equity compensation plan by employers technically do not have any ascertainable FMV and, therefore, do not constitute property transferred in connection with the performance of service for purposes of §83(b).
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