83(b) Election Pros and Cons  

83(b) Election is a tax strategy that allows employees or business owners to pay taxes on equity-like stock at the time it’s granted instead of when it vests.   

Pros  

• If the stock rises, you are taxed on the initial value.   

• You can qualify for long-term capital gains tax rates.   

Cons  

• If the stock value decreases, you pay taxes on a higher value.   

• You can’t get a refund on taxes paid if you leave the company or the stock becomes worthless.