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Saving tax on restricted stock awards with the Sec. 83(b) election

Posted by Admin Posted on May 29 2018

If you receive restricted stock from your employer, you may have a tax-saving opportunity: the Section 83(b) election. Income recognition for restricted stock normally is deferred until the stock is vested or you sell it, when you pay taxes on the fair market value at your ordinary-income rate. But if you make the Sec. 83(b) election, you recognize ordinary income when you receive the stock. This converts future appreciation from ordinary income to long-term capital gains income taxed at lower rates. We can help determine whether the election makes sense for you.