Code Section 83(b) Election

[Lion EA]

Client took a picture (why are all my clients doing that now? so hard to read and not at all secure) and emailed or texted me his 83(b) election for 2019 prior to mailing it to the IRS & turning it in to his new company. I'm researching, but have never had this come up in real life before. The FMV on the form is $0.00 and the amount paid by the taxpayer is $0.00. So, when he sells his units down the road, his basis will be $0.00, right? I'm not sure I see the benefit to my client.

My research refers to a cover letter provided with the form, but client has only a one-page form his new company gave him to sign. It's due prior to 6 March.  Any direction, thoughts, opinions?

[EricF]

The holding period begins at the date the stock is received rather than when the restrictions come off.  So your client can sell the stock as soon as the restrictions come off and get long-term capital gain treatment.

[Lion EA]

That is a benefit. Thank you, Eric. I was stuck on the fact that he has nothing to take into income now, and didn't notice that the date changes with this election.