83(b) ELECTION
01.Core Concepts
Assume Kristi, a new executive, was granted restricted stock worth $10,000 that vests 100% at the end of five years. Kristi believes that the value of the stock will increase significantly over the next five years. Kristi can make an 83(b) election and include the $10,000 into her current income. What are the tax implications upon grant and when the shares vest? How would the tax treatment be different if she did not file the election? What if she files the election and terminates after two years?