83(b) Election Tax Savings Calculator

Q: Can I file 83(b) for LLC profits interests?

Yes. Filing 83(b) for qualifying profits interests provides certainty and starts the long-term capital gains holding period.

Q: What happens if I don't file 83(b)?

You'll be taxed at ordinary income rates on the FMV of equity as it vests.

Q: What are the risks of filing 83(b)?

Paying tax upfront on equity that may become worthless. You cannot recover the tax paid.

Calculate how much you could save by filing an 83(b) election within 30 days of receiving restricted stock or LLC interests.

Entity Type

C-Corp Stock

LLC / Partnership Interest

Your Equity Details

Current FMV at Grant ($)

Amount Paid for Equity ($)

Expected FMV at Full Vesting ($)

Expected FMV at Sale ($)

Vesting Period (years)

Grant Date

Federal Tax Bracket (%)

State Tax Rate (%)

Estimated Tax Savings with 83(b)

Tax Burden Comparison

Sensitivity — Savings vs. Sale Price

Tax Event Timeline

Risk Warning: If you file 83(b) and the equity later becomes worthless, you cannot recover the taxes paid at grant. The 83(b) election is irrevocable. Only file if you believe the equity will appreciate in value.

83(b) Filing Checklist

Complete IRS 83(b) election letter (include description of property, FMV, amount paid)
Mail to IRS within 30 days of grant (certified mail recommended)
Provide copy to your employer/company
Attach copy to your tax return for the year of grant
Keep proof of mailing (certified mail receipt)
For LLCs: confirm profits interest qualifies under Rev. Proc. 93-27

Understanding the 83(b) Election

What is an 83(b) Election?

Section 83(b) of the Internal Revenue Code allows you to elect to be taxed on the fair market value of restricted equity at the time of grant rather than at vesting. This can result in significant tax savings if the equity appreciates substantially during the vesting period.

Why the 30-Day Deadline Matters

You must file the 83(b) election within 30 days of receiving the equity. This deadline is absolute—there are no extensions. Missing it means you lose the ability to make the election entirely, and you'll be taxed at ordinary income rates as equity vests.

C-Corp vs LLC

For C-Corp restricted stock, 83(b) converts future vesting income from ordinary income to long-term capital gains. For LLC profits interests, the analysis is different: if the interest qualifies under Rev. Proc. 93-27 (liquidation value of zero at grant), there may be no tax at grant even without 83(b). However, filing 83(b) provides certainty and starts the LTCG holding period.

The Risk

If you file 83(b) and pay tax upfront, but the equity later becomes worthless (company fails), you cannot recover the tax you paid. You may be able to claim a capital loss, but this is limited.

Frequently Asked Questions

What is an 83(b) election?

An 83(b) election lets you choose to be taxed on restricted equity at grant (when value is low) rather than at vesting (when value may be much higher). This can convert future appreciation from ordinary income to long-term capital gains.

What is the deadline to file an 83(b) election?

You must file within 30 calendar days of receiving the equity. This deadline is absolute and cannot be extended. Mail the election to the IRS via certified mail.

Can I file 83(b) for LLC profits interests?

Yes. While profits interests qualifying under Rev. Proc. 93-27 may already have zero value at grant, filing 83(b) provides certainty and starts the long-term capital gains holding period.

What happens if I don't file 83(b)?

Without 83(b), you'll be taxed at ordinary income rates on the fair market value of the equity as it vests, which can result in a much larger tax bill if the equity has appreciated significantly.

What are the risks of filing 83(b)?

The main risk is paying tax upfront on equity that may become worthless. If the company fails, you've paid tax on value you never realized. You can claim a capital loss, but it's limited.

Need Help with Your 83(b) Election?

Get a review of your equity grant and 83(b) filing strategy.

Schedule a Consultation

$575 flat fee — includes term sheet review + vesting schedule