RESTRICTED STOCK IN STARTUPS

ELECTION TO INCLUDE VALUE OF RESTRICTED STOCK OR PROPERTY IN GROSS INCOME IN YEAR OF TRANSFER UNDER CODE Section 83(B)

• A Section 83(b) Election is made to include the value of restricted property at the time of transfer (minus any amount you paid for the property) in your income for the year it is transferred. 
• If you make this choice, the substantial vesting rules do not apply and, generally, any later appreciation in value is not included in your compensation when the property becomes substantially vested. 
• Your basis for figuring gain or loss when you sell the property is the amount you paid for it plus the amount you included in income as compensation.
• To make the Section 83(b) Election, file a written statement with the IRS office where you file your return no later than 30 days after the date the property was transferred. 
• You must sign the statement and indicate on it that you are making the choice under section 83(b) of the Internal Revenue Code

No exceptions to this rule are made.

Source: irs.gov