It depends on all the facts and circumstances as to how you will utilize your cost basis in Company A stock. It's unclear as to whether Company B awarded any stock to the stockholders of Company A.
Qualified Dividends:
The qualified dividends cannot be offset by your cost basis in the vested stock because they are dividends and not a sale for tax purposes.
Stock- Company A.
- If you stock becomes worthless and there is no plan to pay you for the stock by Company B, then you might have a sale of worthless stock where the selling price is zero and the cost basis is your purchase price creating a loss.
- If you should be awarded stock in Company B, then the cost basis in the new stock is carried over from the old stock.
The 83(b) election is a provision under the Internal Revenue Code (IRC) that gives an employee, or startup founder, the option to pay taxes on the total fair market value of restricted stock at the time of granting.
- Complete the IRS 83(b) form that has been provided to
- Mail the completed form to the IRS within 30 days of your Award Date (mail to the IRS Service Center where you file your taxes.
- Mail a copy of the completed form to your employer.
You would have had to attach a copy of the completed and filed form to your income tax return when you file your income taxes for the year in which the election is made.
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