My Stock Purchase Agreement says I'm paying $390k in "I.P." and receiving 300k shares in a startup. In my Section 83(b) election, what do I use for "amount paid"?

[basefrequency]

I'm cofounding the startup and not putting in any money, only Intellectual Property. That IP was valued at $390,000 but I didn't actually contribute any money. In theory, that means I paid $1.30 in IP per share received. Now, in my Section 83(b) election form, it's asking how much I paid. Par value for the shares is $0.0001 per share. If I indicate that I paid $1.30 per share then the Section 83(b) would show a massive loss, which doesn't seem right.

Calculations below:

The fair market value of the Shares at the time of the transfer to the undersigned: $[ 0.0001 ] per Share x [ 300000 ] Shares = $[ 30 ].

The amount paid for the Shares transferred: $[ 1.30 ] per Share x [ 300000 ] Shares = $[ 390000 ].

The amount to include in gross income is: $[ -389970 ].

[KochuK]

Hi basefrequency,

83(b) election is not supported by TurboTax.

However, below threads have many relevant discussions on this topic. Please refer to Mr. Neil Kossler's write-up.

https://www.quora.com/Founded-a-company-and-filed-for-83b-in-exchange-for-IP-Should-I-report-these-a... 

If the amount paid is equal or larger than fair market value, then the amount to include in gross income is $0.

Hope this helps.

[Rick19744]

A few comments related to the question:

• There are too few details to provide sufficient guidance
• There is no indication of what type of entity is being formed
• There is no indication of how many individuals are contributing property or $$
• There is no indication of vesting
• How was the value determined
• Regardless of the responses to the above, you need to have a one on one with a tax professional who can read the agreement, understand the responses to the above questions and ask any other questions that may come about during the discussion.
• Don't be penny wise and pound foolish.  Meet with a tax professional.