4 ms·
The advice people are giving you is way too complex. Here is the simple answer: Don't worry about taxes in this case. 1) An 83b is irrelevant for this problem
by crhulls 17y ago
The advice people are giving you is way too complex. Here is the simple answer: Don't worry about taxes in this case.
1) An 83b is irrelevant for this problem (you aren't vesting over time, thus there is no chance of a large increase in the share price before you get your grant)
2) You aren't getting $2000 a month in stock. You are getting what he is saying is a fair equivalent of $2000 a month. You might have to report a couple bucks a month in income to the IRS, but it will be negligible because the real value of anything he gives you will be basically zero on paper
3) You pay taxes on the market rate of anything you get..keep that in mind.
4) If you really don't want to worry, don't get a stock or options grant, just "purchase" your shares from the company. At a fraction of a cent each, the shares are essentially free, so just write the guy a check. Since you bought them you won't be taxed until you have a gain.
- joshhart 17y agoOK this makes some sense. As long as there is no valuation, I basically don't have to pay taxes on whatever salary I convert to equity because the current value is nil. Now if/when the equity is actually worth something, I just have to pay capital gains, right?
- anamax 17y ago> 1) An 83b is irrelevant for this problem (you aren't vesting over time, thus there is no chance of a large increase in the share price before you get your grant) How do we know that he is purchasing all his stock up front with no restrictions? If he is, he can quit now and get a job that pays him market rate while keeping all the stock. Somehow I doubt that that's the case. If he's purchasing stock each month (or getting the right to keep stock that he's been granted, that is, repurchase rights are expiring), 83(b) is relevant.