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Posts tagged section 83(b) elections

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IRS Rules That Failure to Attach 83(b) Election to Form 1040 Did Not Invalidate the Election

In Private Letter Ruling 201405008, the Internal Revenue Service recently ruled that a Section 83(b) election was valid in spite of the fact that it was not attached to the taxpayer’s personal tax return for the year of the election.

In general, under Code Section 83(b), taxpayers can elect to be taxed currently on the excess of the value of property that they receive over the amount that they pay for it, even if their interest in the property has not yet vested.  If the property subsequently increases in value, this election can be very valuable by resulting in appreciation being taxed at capital gains rates that might otherwise be taxed as ordinary income.

Posted Under: section 83(b) elections