Section 83(b) Election Form
(Restricted Stock)

Summary

This template is for an individual to make a Section 83(b) election upon receiving a restricted stock grant to include the value of the award in income for the year of grant. It contains practical guidance, drafting notes, and an optional clause pertaining to spousal consent. Companies making compensatory restricted stock grants should provide this form upon the grant of the award to recipients so that they may file a tax election under I.R.C. § 83(b) with the Internal Revenue Service. A properly filed Section 83(b) election enables the award recipient to include in ordinary income the fair market value of the stock underlying the award as of the date the shares are issued or transferred to the recipient, less the amount paid for the stock. Any gain or loss in the value of the shares from the date of issuance to the date of sale is then taxed as a capital gain or loss. I.R.C. § 83(b); Treas. Reg. § 1.83-2(a). Part of this template provides instructions to the award recipient and the effect of a properly filed election form. Part provides a model template to be completed and submitted to the IRS and the company by the award recipient. Part provides a cover letter to the IRS for the election form. Section 83(b) elections must be sent to the IRS within 30 days of the grant date. The IRS began providing a form that may be used for this purpose in 2024. See IRS Form 15620. For a full listing of key content covering equity incentive plan considerations, see Equity Incentive Plan Resource Kit. For background, see Taxation of Compensatory Transfers of Property (IRC § 83). For a similar template to be used in connection with a profits interest award, see Section 83(b) Election Form (Profits Interest). For more in-depth coverage of the federal taxation consequences of the filing of Section 83(b) election forms for various types of equity awards, see Lexis Tax Advisor -- Federal Topical § 1A:14.07. For a summary of common types of equity-based compensation, see Partnership and LLC Equity Compensation. For a Q&A about the application of Section 83 to deferred compensation, see Nonqualified Deferred Compensation Answer Book (CCH) Q 1:32, Q 1:32, Do the rules of Code Section 83, which govern the taxation of transfers of property as compensation for services rendered, apply to the taxation of nonqualified plans?"