Section 83

Section 83(b) Election

A tax filing within 30 days of grant that allows employees granted stock to pay taxes on the grant date instead of on the date restrictions lapse. If an employee files the election, taxes are based on the fair market value on the grant date, with any future appreciation taxed as a capital gain. If the employee does not file an election, taxes are based on the fair market value on the date the restrictions lapse, which will be higher assuming the stock has appreciated in value.
References in periodicals archive ?
In the said Act, after section 83, the following new section shall be inserted:
Service Tax-Vide section 83, Section 35F of the Central Excise Act is already applicable to service tax.
Contract Awarded for section 83 risk management plan and accounting treatments
Contravention of the provisions of section 49 with regard to the limit of election expenses is a "corrupt practice'" within the meaning of section 78 and the failure with regard to submission of the return of election expenses within ten days from the poll of an election to the National Assembly/Provincial Assemblies, as laid down under section 50 of the Act, is an "illegal practices" within the meaning of section 83 of the Act.
Internal Revenue Service regulations on longevity annuity contracts, reporting and notice requirements for deferred vested benefits under Code Section 6057, and property transferred in connection with the performance of services under Code Section 83
If you're awarded restricted stock before the end of 2012, and it's looking like your tax rate will go up in the future, the benefits of a Section 83 (b) election may be more likely to out weigh the potential disadvantages.
The Employment Context: The Section 83 (b) Election
Private letter rulings and IRC Section 83 provide some guidance regarding what might constitute a substantial risk of forfeiture under plans that use something other than simple service-based vesting schedules.
A qualified capital interest is a partner's interest resulting from (1) money or properly contributed; (2) any amounts included under section 83 (property received for services); and (3) net taxable income taken into account on such interest.
Massachusetts General Law Chapter 71, Section 83, says, "School officials shall not abridge the right of students as to personal right of dress and appearance, except if such officials determine that such personal dress and appearance violate reasonable standards of health, safety and cleanliness.
83-3(e) provides that "for purposes of section 83 and the regulations thereunder, the term 'property' includes real and personal property other than either money or an unfunded and unsecured promise to pay money or property in the future.
Instead, taxation occurred under section 83 upon vesting (the absence of "a substantial risk of forfeiture") or earlier transferability.

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