IRC Section 83(b) Election for Restricted Property | CPE Course

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Course Details

Course Information

smart_display Format
On-Demand
signal_cellular_alt Difficulty Level
Intermediate
work Practice Area
Tax Preparer

Date & Time

event Date
Tuesday, July 2, 2024
schedule Time
1:00 p.m. ET./10:00 a.m. PT
timer Program Length
110 minutes

Credit Information

BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00

CPE

ALL

This webinar will outline the advantages and risks of making an IRC Section 83(b) election. Our panel of federal income taxation professionals will point out scenarios when the election is advantageous, the caveats of making the election that a service provider must consider and review the steps for submitting the election.

Faculty

David A. Gilbert

Of Counsel

Blank Rome LLP

Mr. Gilbert concentrates his practice in the area of business tax law. He represents domestic and international clients in a wide range of federal, state, and local tax matters. Mr. Gilbert advises publicly traded and private corporations, partnerships, funds, tax-exempt organizations, and individuals on various matters, including those arising in taxable and tax-free mergers and acquisitions, divestitures, restructurings, spin-offs, redemptions, and liquidations; inbound and outbound investments; formation, operation, and acquisition of limited liability companies, partnerships, and Subchapter S corporations; real estate transactions; financings; and tax controversies. He also has experience advising private equity and hedge fund sponsors on the tax aspects of fund formation as well as representing institutional investors regarding joint ventures and other investments. Mr. Gilbert is admitted to practice in New York and Florida, and is also a certified public accountant in New York. He earned his LL.M. in Taxation from New York University School of Law and his J.D. from the University of Alabama School of Law. Mr. Gilbert also received his M.S. in Accounting from the University of Florida and his B.S. in Accounting and Finance from Florida State University.

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TJ Wilkinson

Shareholder

Shulman Rogers, PA

Mr. Wilkinson provides clients with insight into the income tax implications of their business transactions and helps them to come up with tax-efficient, tax-compliant structures that maximize value while minimizing tax risk. He advises on matters relating to mergers, acquisitions, distributions, entity formation, qualified small business stock (Section 1202), private equity investments, capital structure, loans, equity compensation plans (including Section 409A compliance and risk), and implications of new legislation and guidance. Mr. wilkinson earned degrees from Harvard University (A.B.), Columbia Law School (J.D.) and New York University School of Law (LL.M.). He is an active member of the American Bar Association.

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Description

Paying service providers with equity can benefit companies and service providers. Service providers receive an asset that, hopefully, appreciates, while employers can offer a powerful incentive for service providers to remain with the company. Usually, compensation is taxed when received at ordinary income rates. Since restricted property is forfeitable and not transferrable, it is generally not taxed until the restrictions are satisfied or the property becomes transferrable.

An election under IRC Section 83(b) allows a service provider to pay tax on the restricted property received based on its value on the date it is granted rather than the date it is vested. This allows the recipient to pay tax upon a sale of the property at capital gains rates (subject to satisfying certain holding period requirements) rather than ordinary rates on the appreciation that takes place between the grant date and vesting date.

There are caveats to consider for the company and service provider. The restricted property value could depreciate. The election must be timely and properly made. Yet the tax savings can be substantial. Tax advisers, employers, and service providers of businesses considering or making equity grants need to understand the details of Section 83(b) elections to reap the tax savings.

Listen as our panel of tax and compensation and benefits experts reviews the nuances of Section 83(b) elections.

Outline

IRC Section 83(b): Introduction
Eligibility
Taxation of restricted property
Company considerations
Service provider considerations
S corporation considerations
Profits interests; protective Section 83(b) elections
Missed elections
Examples

Benefits

The panel will cover these and other critical issues:

When is it beneficial to file a Section 83(b) election?
When is it not advantageous to file a Section 83(b) election?
How is the tax calculated when restricted property is granted, and a Section 83(b) election is in place? What are the tax consequences upon vesting?
How is the tax calculated upon vesting of restricted property where a Section 83(b) election is not in place?
How is a missed Section 83(b) election rectified?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

Determine how stock grants are taxed with a Section 83(b) election
Ascertain when an election under IRC Section 83(b) could be advantageous for a taxpayer
Decide how to remedy a missed Section 83(b) election
Identify the required steps to properly elect taxation under IRC Section 83(b)

Field of Study: Taxes
Level of Knowledge: Intermediate
Advance Preparation: None
Teaching Method: Seminar/Lecture
Delivery Method: Group-Internet (via computer)
Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.