Irs Rules That Failure To Attach 83b Election To Form 1040 Did Not Invalida | Blog | Employee Benefit Plans | Services | Baker Newman Noyes

Irs Rules That Failure To Attach 83b Election To Form 1040 Did Not Invalida | Blog | Employee Benefit Plans | Services | Baker Newman Noyes

February 3, 2014 IRS Rules That Failure to Attach 83(b) Election to Form 1040 Did Not Invalidate the Election Posted By In Private Letter Ruling 201405008 , the Internal Revenue Service recently ruled that a Section 83(b) election was valid in spite of the fact that it was not attached to the taxpayer's personal tax return for the year of the election. In general, under Code Section 83(b), taxpayers can elect to be taxed currently on the excess of the value of property that they receive over the amount that they pay for it, even if their interest in the property has not yet vested.  If the property subsequently increases in value, this election can be very valuable by resulting in appreciation being taxed at capital gains rates that might otherwise be taxed as ordinary income.  Code Section 83(b)(2) states that the election "shall be made in such manner as the Secretary prescribes and shall be made not later than 30 days after the date of such transfer."  Regulations Section 1.

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