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The same is true if you are given actual stock. You owe taxes when it vests (or hypothetically when you are given it if it is unrestricted stock) not when you s
by TheCoelacanth 10y ago
The same is true if you are given actual stock. You owe taxes when it vests (or hypothetically when you are given it if it is unrestricted stock) not when you sell it.
- morgante 10y agoThis can be avoided with an 83b election.
- SeoxyS 10y agoYou can file an 83b election with the IRS to avoid this problem, thankfully.
- TheCoelacanth 10y agoThat just moves the point where you have to lay out money to even earlier. That's great if it's an early stage startup where the shares are worth practically nothing, but it's even worse if they are already worth a lot.
- SeoxyS 10y agoOh sure; but you won't have to lay down any money until you sell your stock; and paying taxes on real money is a lot easier than paying taxes on imaginary money.