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§83(b) Election Playbook

Elect within 30 days on restricted equity — convert future ordinary income to LTCG.

Overview

When you receive restricted stock or profits-interest units, §83(b) lets you pay ordinary income tax on today's (often near-zero) value instead of the vested value years later. Starts the LTCG clock immediately and pairs perfectly with QSBS §1202. Must be filed with the IRS within 30 days of grant — no extensions, no do-overs. Applies to founders, early employees, and profits-interest LLC recipients.

Best fit
Startup foundersEarly employees with restricted stockLLC profits-interest holders
Estimated impact
Convert 37% ordinary income to 0–20% LTCG on entire appreciation

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