On July 26, 2016, the IRS issued final regulations under Section
83 of the Internal Revenue Code of 1986, as amended ("Section
83"), eliminating the requirement for taxpayers to submit a
copy of a Section 83(b) election with their tax returns for the
year in which the relevant property is transferred.
Under Section 83, when property is transferred in connection
with the performance of services, the service provider must include
in gross income, (i) the fair market value of the property as of
the first time the property is transferable or no longer
"subject to a substantial risk of forfeiture," less (ii)
the amount (if any) paid for the property. Generally, this
amount must be included in gross income in the first year that the
property is transferable or is no longer subject to a substantial
risk of forfeiture. However, an election can be made under
Section 83(b) to include the fair market value of the property in
gross income at the time of transfer.
