Code Sec. 83 and 83(b) Elections: Tax Planning for Closely Held Businesses (Completed)

Date: Monday, July 20, 2020
Instructor: Steven G. Siegel
Begin Time:  9:00am Pacific Time
10:00am Mountain Time
11:00am Central Time
12:00pm Eastern Time
CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

Master Rules for Transferring Stock to Employees

This two-hour CPE webinar provides a practical examination of Code Section 83 and important tax ramifications and considerations for employers and employees who transfer and receive stock that may be subject to a substantial risk of forfeiture.

Transferring stock to employees is often a great business move, but making the Code Sec. 83(b) election could turn it into a great tax move as well for both the employee and the employer. Moving income from ordinary income to capital gains for tax treatment is a desirable tax planning goal. When a business transfers stock to an employee as compensation and includes conditions on the transfer, the value of the stock may not be immediately treated as compensation to the employee or deductible by the employer. When the conditions are satisfied, the stock is then income to the employee. A Sec. 83(b) election allows the employee to report compensation income on the value of the stock when received, and then allow a future sale to be treated as a capital gain. The election can be beneficial to both employer and employee. But there are potential pitfalls and recordkeeping and filing hurdles that must be navigated to ensure that the election is successful.

Who Should Attend
Accountants, tax attorneys and advisors who work with closely held businesses

Topics Covered

  • What Is a Substantial Risk of Forfeiture?
  • How Are Restricted Property Transfers Taxed?
  • The Section 83(b) Election — Elect to Pay Tax When the Transfer Occurs
  • The Tax Consequences of Special Situations Involving Stock Options, Restricted Stock Awards, and Partnership Interests in Profits and Capital

Learning Objectives

  • Identify and apply a solid base of knowledge regarding Code Section 83
  • Recognize the substantial risk of forfeiture when transfers of stock are made to employees

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic understanding of federal income taxes

Advance Preparation
None

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