Section 83(b) Election: Restricted Shares

The legal template for Section 83(b) Election: Restricted Shares is a document that outlines the process and steps involved in making an 83(b) election with respect to restricted shares granted by a company to its employees or individuals.

The template provides a framework for individuals who have received restricted shares as part of their compensation to make an election under Section 83(b) of the Internal Revenue Code (IRC). This section allows the recipient of restricted shares to include the fair market value of the shares in their taxable income at the time of grant, rather than at the time of vesting.

The document guides the individual through the procedure of filing the 83(b) election, including the necessary information to be provided, the timeline for filing, and the appropriate means of submission. It may also include instructions on obtaining a certified mailing or ensuring delivery confirmation when sending the election to the Internal Revenue Service (IRS).

The template may include various components such as:

1. Introduction: Explaining the purpose of the document and providing a brief overview of the 83(b) election process for restricted shares.

2. Definitions: Defining terms used throughout the document, such as "restricted shares," "vesting," "fair market value," and "IRC Section 83(b)."

3. Election Form: Presenting the actual election form to be completed by the individual, which typically includes personal information, details about the restricted shares, and a declaration of making the 83(b) election.

4. Filing Instructions: Outlining the steps to be followed while submitting the election, including the deadline, address, and any additional forms or documents that should be included.

5. Acknowledgment: Including a section for the individual to acknowledge the potential risks and consequences associated with making an 83(b) election, such as the potential accrual of taxes before the shares fully vest.

6. Signature: Providing space for the individual to sign and date the document, along with any instructions on ensuring the election is properly executed.

Overall, this legal template serves as a guide for individuals who need to make an informed decision and file an 83(b) election for restricted shares, ensuring they comply with relevant tax laws and regulations while maximizing potential tax benefits.