Stock Options Section 83-b Election

[MsTabbyKats]

Over the course of decades I reported "exercise of stock options" with a W-2 entry and a Schedule D entry. That was it...no questions asked and never a problem.

A client just exercised options....and in the notice from the company a Section 83-b form was included. He had no idea what to do with it...and the company told him to ask his accountant. That would be me.

I never heard of this form...but according to the rules...he is supposed to fill it out, send a copy to the IRS, give the employer a copy and attach a copy to his tax return. However, it's not an IRS form. I've put a cut/paste below.

Does anybody know what to do with this....if anything? I am clueless!

This statement is made under Sections 55 and 83( b ) of the Internal Revenue Code of 1986, as amended, pursuant to Treasury Regulations Section 1.83-2.

A.The taxpayer who performed the services is:

Name:

Address:

Social Security No.:

B.The property with respect to which the election is made is ______ shares of the common stock of ZocDoc, Inc. C.The property was transferred on __________ ___, _____. D.The taxable year for which the election is made is the calendar year _____. E.The property is subject to a repurchase right pursuant to which the issuer has the right to acquire the property at the original purchase price if for any reason taxpayer’s service with the issuer terminates. The issuer’s repurchase right lapses in a series of installments over a ______-year period ending on __________ ___, _____. F.The fair market value of such property at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is $_____ per share. G.The amount paid for such property is $_____ per share. H.A copy of this statement was furnished to ZocDoc, Inc., for whom taxpayer rendered the services underlying the transfer of such property. I.This statement is executed on __________ ___, _____.

Signature of Spouse (if any) Signature of Taxpayer

Within 30 days after the date of exercise, this election must be filed with the Internal Revenue Service Center where the Optionee files his or her federal income tax returns. The filing should be made by registered or certified mail, return receipt requested. The Optionee must (a) file a copy of the completed form with his or her federal tax return for the current tax year and ( b ) deliver an additional copy to the Company

Edited November 15, 2013 by kcjenkins
to fix the smilies

[jklcpa]

Is this a question about restricted stock units? RSUs are taxed differently than statutory or nonstatutory employee stock purchase plans that you may have dealt with in the past.

[Max W]

According to the following web site, the form does not have to be filed if it is for stock options.

http://www.accountalent.com/?p=429

[jlewis]

Link to Rev Proc 2012-28-

http://www.irs.gov/irb/2012-28_IRB/ar12.html

[MsTabbyKats]

Thanks!

[TaxMan60601]

Agree with you, sec. 83b election is unavailable for restricted stock units or regular stock options, it is for restricted stock options.

Thanks for the link lewis!