topic Made an 83b election in 2017, Fair Market Value was the same as the price I paid for the shares, so no gains were made. Do I need to file anything with my 2017 return? in Get your taxes done using TurboTax

Made an 83b election in 2017, Fair Market Value was the same as the price I paid for the shares, so no gains were made. Do I need to file anything with my 2017 return?

JFSH — Sat, 01 Jun 2019 18:24:45 GMT

I started a business in 2017 (C-Corp), and immediately set up a vesting schedule and submitted my 83b election to the IRS. I know that you no longer need to attach your 83b to your return, but is there any way that I should be referencing it in my 2017 tax return?

I did not get a 1099 MISC, presumably because no gains were realized as I purchased at the Fair Market Value. Should I have received one from my company anyway? I also did not receive a W2, as I'm not yet paid (State law allows this where I am, despite C-Corp).

Thank you.

an 83(b) election means you pay ordinary income tax on gr...

maglib — Sat, 01 Jun 2019 18:24:46 GMT

an 83(b) election means you pay ordinary income tax on grant date. you should receive a 1099 or a w-2 with the reported amounts. The employee must include the excess of the FMV over consideration paid in the year of transfer and it must be reported on the w-2 box 1 or the 1099 box 7.

Because the fair market value of the property at the time of receipt might be nominal–meaning, the tax might be insignificant, and an election will avoid a potentially much higher tax bill later. The election costs nothing because the amount of income you report is the value of the stock minus the amount you paid, and that's zero.

Section 83(b) allows a taxpayer who receives property in connection with the performance of services that is subject to such restrictions (e.g., nonvested property) to elect to recognize this income at the time of transfer. The principal benefit of a Section 83(b) election is that the taxpayer can lock in appreciation which is generally taxable at capital gains rates upon later disposition.

Re: Made an 83b election in 2017, Fair Market Value was the same as the price I paid for the shares, so no gains were made. Do I need to file anything with my 2017 return?

samrapow — Tue, 21 Jan 2020 02:52:29 GMT

Did you ever figure out what to do? I'm in the same situation this year, and I'm unclear about what I'm supposed to do for my taxes.