Can You Revoke an 83(b) Election?
Revoking an 83(b) election is a complex process that requires careful consideration and IRS approval. While it's possible to cancel your election under certain circumstances, the process is intentionally difficult and success is not guaranteed.
Understanding when and how you can revoke an 83(b) election is crucial for startup founders and employees who may need to undo this tax decision.
Key Takeaways
- Limited Time Window: You must request revocation within 30 days of filing the original 83(b) election.
- IRS Consent Required: Revocation requires explicit IRS approval and compelling circumstances.
- Tax Implications: Successfully revoking an 83(b) election can significantly impact your tax situation and future equity treatment.
Main Content
Understanding the Core Concepts
This section delves into the fundamental principles, providing the context needed to appreciate the topic's nuances.
Benefits and Advantages
Discover the key benefits and strategic advantages, highlighting the positive outcomes and opportunities.
Risks and Considerations
A balanced view of potential risks and important considerations to keep in mind, ensuring a well-rounded understanding.
Frequently Asked Questions
Is revocation automatic if shares are forfeited?
No. Forfeiting the shares does not revoke the election. You have still paid the tax, though you may be able to claim a capital loss for the forfeited shares.
Does AMT get refunded?
If you paid Alternative Minimum Tax (AMT) due to an 83(b) election, you may be able to claim it back as a credit in future years, but it is not a simple refund.
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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