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Under Section 83 of the Internal Revenue Code, the founder/employee would not recognize income until the stock vests. However, if a founder/employee makes a voluntary Section 83(b) election, the founder/employee recognizes ‘income’ upon the purchase of the stock. Initially, the purchase price for the stock and the fair market value are the same. Therefore, if an 83(b) election is made, there is no income recognized. Thus, a founder/employee should almost always make an 83(b) election.
Under Section 83 of the Internal Revenue Code, the founder/employee would not recognize income until the stock vests. However, if a founder/employee makes a voluntary Section 83(b) election, the founder/employee recognizes ‘income’ upon the purchase of the stock. Initially, the purchase price for the stock and the fair market value are the same. Therefore, if an 83(b) election is made, there is no income recognized. Thus, a founder/employee should almost always make an 83(b) election.
Alps Venture Partners has extensive experience in assisting companies seeking to comply with Section 83(b) election. Failing to make a timely 83(b) election with the IRS may lead to disastrous tax consequences for a start-up company founder or employee. Alps Venture Partners' highly experienced valuation professionals provide in-depth analyses and valuation expertise required for Section 83(b) compliance.
Alps Venture Partners has extensive experience in assisting companies seeking to comply with Section 83(b) election. Failing to make a timely 83(b) election with the IRS may lead to disastrous tax consequences for a start-up company founder or employee. Alps Venture Partners' highly experienced valuation professionals provide in-depth analyses and valuation expertise required for Section 83(b) compliance.
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