IRS Issues Sample Language for 83(b) Elections

In Revenue Procedure 2012-29, the IRS provided a model for employees wanting to make an 83(b) election for an equity award. Used most commonly with restricted stock, 83(b) elections allow employees to be taxed on the difference between the value of the award at grant minus any consideration paid and then to pay no further tax until the shares are sold. (Learn more about 83(b) elections in our article Stock Options, Restricted Stock, Phantom Stock, Stock Appreciation Rights (SARs), and Employee Stock Purchase Plans.) Until now, there has not been a model form to do this. The new form provides basic information, including the name, number of shares, transfer date, fair market value at transfer, amount paid, and amount includable in gross income. Taxpayers are not required to use the form, however.