IRC §83 · 26 U.S.C. §83
IRC §83: Property Transferred for Services
IRC §83 taxes equity pay at vesting — fair market value minus what you paid — unless an 83(b) election moves the tax to grant day. Thirty days to file it; no extensions, no mercy.
What it governs
- Taxed when transferable or no longer subject to substantial risk of forfeiture
- 83(b) election: tax the grant-day value now, convert all future growth to capital gain
- RSUs: no 83(b) allowed — taxed at vesting, always ordinary
- Employer deducts what the employee includes, in the same year
In the GuideFull treatment in Chapter 10 of the Guide — THE TAX CUTTERY® Guide to Federal Income Taxation, Professional Edition (564 pages, 24 chapters).
Related sectionsIRC §132 — fringes that escape §83 entirely · IRC §409A — the deferral statute equity usually avoids
From the practiceStart the consultation — Paul on video, one question at a time →
Questions this section answers
- Should I file an 83(b) election?
- When the grant-day value is low and growth looks likely: pay a little ordinary income now so all appreciation becomes capital gain. Startup founders with penny-value stock are the classic yes; the 30-day deadline is absolute.
- Can I make an 83(b) on RSUs?
- No — RSUs are unfunded promises, not transferred property, so no election exists. They tax as ordinary income at vesting on the full value. Founders get 83(b); RSU holders get withholding.
- What if I miss the 30-day 83(b) window?
- It’s gone — the statute allows no extensions and the IRS grants no relief. The stock taxes at each vesting date on its then-value. File on day one, certified mail, keep the receipt forever.
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The Guide treats 149 Code sections across 24 chapters — every claim verified against primary sources.
Get the Guide — $299