The 83(b) election is one of those small tasks that startups (especially closely held companies) need to think about, but which is often also easily forgotten or ignored.  The failure to take advantage of the election can be costly: a large tax bill for a shareholder years down the line could be the result.

So what is the election, and when does it usually apply?  I’ll try my best to tackle both issues in plain English.  Although this topic has been blogged about quite a bit, the issue can be complicated, and explanations can quickly get confusing, so I thought I’d provide a concise (sort of) summary.  (more…)