Tax
Section 83(b) Election
Quick definition
Tax election for restricted stock holders to be taxed on grant-date value instead of vesting value.
A Section 83(b) election lets you pay ordinary income tax on the value of restricted stock at grant instead of at vesting. This is nearly always beneficial if current value is low and expected to rise. Must be filed with the IRS within 30 days of grant.
See this in action
Insights, guides, and tools where Section 83(b) Election shows up.
- insight
The Delaware C-Corp Startup Tax Guide: Every Filing You Owe
- insight
How to File an 83(b) Election: Form 15620, E-Filing, and the 30-Day Clock
- insight
Missed Your 83(b) Election Deadline? What Happens and What You Can Actually Do
- insight
How to Pay Yourself as a Startup Founder: Salary, Distributions, Equity, and Tax Structure
Frequently asked questions
- What is Section 83(b) Election?
- A Section 83(b) election lets you pay ordinary income tax on the value of restricted stock at grant instead of at vesting. This is nearly always beneficial if current value is low and expected to rise. Must be filed with the IRS within 30 days of grant.
- Why is Section 83(b) Election important for startups?
- Section 83(b) Election is a tax concept that matters for startup founders because it shows up in fundraising readiness, financial decision-making, and operational discipline at the stage where mistakes are expensive to undo. Founders who understand it are better prepared for diligence, board meetings, and investor conversations.
- What category does Section 83(b) Election belong to?
- Section 83(b) Election is a Tax term in the StartupCFO finance glossary, alongside other tax concepts that founders, CFOs, and accountants use in startup operations and reporting.
- Where can I learn more about Section 83(b) Election?
- Beyond this definition, see the related tax terms below, or explore StartupCFO's insights and tools that put Section 83(b) Election in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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