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🇺🇸 US · US tax83(b) election
Also called: 83b, section 83(b) election
In one line
A US tax filing that lets you be taxed on restricted stock (or early-exercised options) at grant, when the value is low, rather than as it vests.
In plain English
File an 83(b) within 30 days of getting restricted shares and you lock in tax on today's tiny value, starting your capital-gains clock early. Skip it and you're taxed on the (hopefully much larger) value as each tranche vests.
If you were explaining it to a 5-year-old
You tell the taxman 'count my toy as worth 1 coin now' while it's cheap, so later when it's worth 100 you don't get a big tax bill for growing.
Why it matters when you sell
A timely 83(b) can slash your eventual tax and start the clock for long-term and QSBS treatment — a decision with big downstream effects on what you keep when you sell.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
Primary references for this term: IRS (US tax). Our definitions are written in plain English and kept evergreen — see the glossary methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.