83(b) Elections
83(b) elections seem simple but can be tricky. The general rule is that the recipient of restricted stock (stock subject to vesting) has 30 days from the date of issuance of the stock to file her 83(b) election. Unfortunately, ambiguity often creeps in. For example, what if you sign the contract for the restricted stock on day 1 but the stock is not issued until day 10? What happens if the stock is issued without restriction on day 1 and restrictions are imposed (that is a contract providing for vesting is entered into) by an investor on day 2? And is the result different if the restrictions are imposed on day 15? Day 30? Day 365? Often facts intervene to make life complicated. You need to talk to your accountant, lawyer or tax professional to make sure you get it right. The consequences of getting it wrong can be really unpleasant.
No comments yet
Start the discussion by using the form below