IRS Releases Standardized Section 83(b) Election

By Greg Gautam

As explained in a prior blog post, an employee who timely files a Section 83(b) election will be taxed on the fair market value of property transferred (typically restricted stock) to him or her in exchange for services on the date of grant rather than as the property vests.  In addition, by making a Section 83(b) election, the employee will start the clock on the capital gains holding period. The Section 83(b) election must be filed with the Internal Revenue Service (“IRS”) within 30 days from the date on which the property is transferred to the employee.

On November 7, 2024, the IRS released Form 15620, an approved IRS form for making a Section 83(b) election.  This is the first time the IRS has provided a standardized form that taxpayers may, but are not required to, use to make Section 83(b) elections.  Consistent with the existing Section 83(b) election rules, a taxpayers making the election using the new Form must mail their completed Form 15620 to the IRS office where the taxpayer files his or her federal income tax return. Practitioners expect the IRS to make electronic filing of Form 15620 available in the future.