Language you can use in making the section 83b election.
The IRS does not provide a form to use in making the section 83b election. However, in 2012 it published guidance on this election in a document known as Rev. Proc. 2012-29. As part of that guidance, the IRS provided sample language you are permitted, but not required, to use in making the election. The following is based on this sample language.
Section 83(b) Election
The undersigned taxpayer hereby elects, pursuant to § 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares.
- The name, taxpayer identification number, address of the undersigned, and the taxable year for which this election is being made are:
TAXPAYER’S NAME: [name]
TAXPAYER’S SOCIAL SECURITY NUMBER: [SSN]
TAXABLE YEAR: Calendar Year [year]
- The property which is the subject of this election is [number] shares of common stock of [company].
- The property was transferred to the undersigned on [DATE].
- The property is subject to the following restrictions: [Describe applicable restrictions here.]
- The fair market value of the property at the time of transfer (determined without regard to any restriction other than a nonlapse restriction as defined in § 1.83-3(h) of the Income Tax Regulations) is: [price] per share x [number] shares = [value].
- For the property transferred, the undersigned paid [purchase price] per share x [number] shares = [amount paid].
- The amount to include in gross income is [taxable amount]. [The result of the amount reported in Item 5 minus the amount reported in Item 6.]
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the person for whom the services were performed. Additionally, the undersigned will include a copy of the election with his or her income tax return for the taxable year in which the property is transferred. The undersigned is the person performing the services in connection with which the property was transferred.