SESK: Stuff Everyone Should Know · sesk.info/founder-83b-tax-at-transfer
What timing does an 83(b) election choose for restricted property income?
It chooses taxation based on value at transfer instead of vesting.
- At transfer rather than later vesting ✔
- Only when the company is sold
- On each date a portion vests
Why: With an 83(b) election you include the stock's value at transfer, minus what you paid, in income now. Without it, income is generally counted as the stock vests.
Huh, didn't know that: If you pay full fair market value for the stock, the amount included in income can be zero.
Why did the tax election arrive early? It wanted the transfer date.
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References
Answer: At transfer rather than later vesting. With an 83(b) election you include the stock's value at transfer, minus what you paid, in income now. Without it, income is generally counted as the stock vests.
- Form 15620, Section 83(b) Election www.irs.gov/pub/irs-pdf/f15620.pdf
to currently include in gross income the excess (if any) of the property's fair market value at the time of the transfer
Checked 2026-10-11.
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