Ask an AI Accountant

Filing a Form 83(b) election isn't about whether you've sold your stock or not. It's about how you want to be taxed on stock you received, typically from your employer, that's subject to vesting.

Here's the deal: When you receive stock that's subject to vesting, you usually pay taxes on it as it vests. The IRS sees each vesting event as taxable income. But if you file an 83(b) election within 30 days of receiving the stock, you're choosing to pay all the taxes upfront based on the stock's value at the time you received it.

Why would you do this? Well, if you believe the stock's value will go up significantly over the vesting period, paying taxes upfront could save you money in the long run. You'd be taxed on the lower initial value, not the higher future value.

But remember, there's a risk. If the stock's value decreases or if you leave the company before the stock vests, you don't get a refund on the taxes you paid upfront. So, it's a bit of a gamble.

In short, whether or not you've sold the stock doesn't really factor into the 83(b) decision. It's more about your predictions for the stock's value and your plans with the company.