Section 83(b) Election Tax Calculator

Under Internal Revenue Code Section 83(b), a recipient of restricted property (such as unvested stock) can elect to be taxed on its value at the time of grant rather than at vesting. The election must be filed with the IRS within 30 days of the transfer. It can reduce ordinary income tax if the stock appreciates before vesting, shifting future gains to capital gain treatment.

With an 83(b) election, ordinary income equals the fair market value at grant minus any amount you paid for the shares, multiplied by the number of shares. That bargain element is taxed at your ordinary income tax rate in the grant year. This calculator multiplies the per-share spread by share count and your ordinary rate.

Without an 83(b) election, you recognize ordinary income as the stock vests, based on the fair market value at each vesting date minus what you paid. If the stock rises in value between grant and vesting, your taxable income (and tax) is higher. This calculator estimates the tax at vesting using the vesting FMV you enter.

You pay tax now on value you may never realize. If the company fails or you forfeit unvested shares, you generally cannot recover the tax already paid. The election is also irrevocable. Weigh the potential tax savings against the risk that the shares lose value or are forfeited.

No. It compares only the ordinary income tax at grant (with an election) versus at vesting (without one). After an 83(b) election, future appreciation is generally taxed as capital gain when you sell, and the holding period starts at grant. Model the eventual sale separately with a capital gains calculator.