What Happens to Your 83(b) If the Startup Fails?
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Understanding the Core Concepts
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Risks and Considerations
A balanced view of potential risks and important considerations to keep in mind, ensuring a well-rounded understanding.
Frequently Asked Questions
Can I deduct a loss if the company shuts down?
Yes, if your shares become worthless, you can typically claim a capital loss. However, the tax benefit of a capital loss may be less than the ordinary income tax you originally paid.
Is revocation possible?
Revoking an 83(b) election is extremely rare and requires IRS consent, which is seldom granted. You should consider the election permanent.
Get Personalized Help
Navigating tax decisions can be complex. For tailored advice that fits your specific situation, we recommend consulting with a qualified CPA.
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