United States

Final section 83 regulations identical to proposed regulations

Copy of section 83(b) election need not be filed with taxpayer’s return

TAX ALERT  | 

The IRS issued final regulations (TD 9779) that make permanent the guidance that had been issued as proposed regulations in July 2015 eliminating the regulatory requirement that a copy of a section 83(b) election be attached to the taxpayer’s income tax return for the year in which the election was applicable. The final regulations apply to property transferred on or after Jan. 1, 2016. However, for transfers on or after Jan. 1, 2015, and prior to Jan. 1, 2016, the preamble to the proposed regulations provide that taxpayers may rely on the guidance in the proposed regulations—the language of which is identical to the guidance in the final regulations.

Besides finalizing the guidance that had been contained in the proposed regulations, the final regulations do not otherwise alter or modify the requirements for making the section 83(b) election. The election must be made in writing and filed with the IRS district office where the taxpayer files his or her income tax returns within 30 days of the transfer of the restricted property. The taxpayer must also provide a copy of the election to the employer. Rev. Proc. 2012-29 provides IRS model language and a sample election form.

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