Which of the following is false regarding a section 83(b) election?
A) The election freezes the value of the employee's compensation at the grant date.
B) The election is an important tax planning tool if the stock is expected to increase in value.
C) The election must be made within 30 days of the grant date.
D) If an employee leaves before the vesting date, any loss is limited to $3,000.

Question

Quizplus · Accepted Answer

This statement is false. If an employee leaves before the vesting date, the unvested shares are forfeited and the employee loses the opportunity to receive any future benefits from those shares. There is no limitation to the loss amount.

Which of the Following Is False Regarding a Section 83(b)