To begin, a Section 83(b) election is a form you send the IRS notifying it that you’d like to be taxed on your equity on the date the equity was granted to you instead of the date the equity vests. You must make this election within 30 days of receiving ownership of the vested stock interest. It almost always makes sense for a Section 83(b) election when the restricted stock is worth a nominal amount like $.001.
Internal Revenue Code (IRC) section 83 applies to any “person” who receives restricted assets as payment for services provided to someone else. A “person” is defined in IRC § 7701(a)(1) as “an individual, a trust, estate, partnership, association, company or corporation.” Thus, a corporation or other entity that receives restricted stock in exchange for services is subject to section 83.
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