83(b) Election For Corporation - Free Download on UpCounsel

83(b) Election For Corporation

An 83(b) election is an IRS filing which is typically filed when vesting is placed on a founding Member's ownership. If the founder/employee does not make the 83(b) election, then he or she may have income as the ownership “vests" and will have to pay income taxes on the income.

ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code, to include in taxpayer’s gross income or alternative minimum taxable income, as applicable, for the current taxable year, the amount of any income that may be taxable to taxpayer in connection with taxpayer’s receipt of the property described below:

1.      The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

·         NAME OF TAXPAYER:      [Founder Name]

·         NAME OF SPOUSE:         [Spouse Name]

·         ADDRESS:                         [Founder Address]

·         IDENTIFICATION NO. OF TAXPAYER:             [Founder Social Sercurity]

·         IDENTIFICATION NO. OF SPOUSE:                [Spouse Social if applicable]

·         TAXABLE YEAR:              [Taxable Year]

2.      The property with respect to which the election is made is described as follows: [Founder Purchased Shares] shares of the Common Stock of [Company Name] (the “Company”).

3.      The date on which the property was transferred is:  [Stock Sale Date]

4.      The property is subject to the following restrictions: Repurchase option at cost in favor of the Company upon termination of taxpayer’s employment or consulting relationship.

5.      The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is:  $ [Stock Purchase Price].

6.      The amount (if any) paid for such property:  $ [Stock Purchase Price].

The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the abovedescribed property.  The transferee of such property is the person performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.

[Founder Name]

 

 

 _________________ Founder Sign Here

[Date]

[Spouse Name if applicable

 

 _________________ Spouse Sign Here

[Date]

 


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This form has been prepared for general informational purposes only. It does not constitute legal advice, advertising, a solicitation, or tax advice. Transmission of this form and the information contained herein is not intended to create, and receipt thereof does not constitute formation of, an attorney-client relationship. You should not rely upon this document or information for any purpose without seeking legal advice from an appropriately licensed attorney, including without limitation to review and provide advice on the terms of this form, the appropriate approvals required in connection with the transactions contemplated by this form, and any securities law and other legal issues contemplated by this form or the transactions contemplated by this form.

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