Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-30-2016, 08:42 AM
Junior Member
 
Join Date: Mar 2016
Posts: 1
K-1 basis after an 83(b) election

I received a k-1 from my firm for 2015. I have not contributed anything other than time and effort. I did file an 83(b) election. The shares were granted fully vested in 2015, and so this is the first year. The partnership took a significant loss (we are a startup in pre-profitable stage). Would the amount claimed on the 83(b) election be my starting basis? It would seem to me that the amount I claimed on the 83(b) election is the amount of income I am declaring these shares to be worth and received as income, which is really my contribution to the firm. Any thoughts or pointers in the right direction would be much appreciated.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 03-30-2016, 03:50 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
I received a k-1 from my firm for 2015. I have not contributed anything other than time and effort. I did file an 83(b) election. The shares were granted fully vested in 2015, and so this is the first year. The partnership took a significant loss (we are a startup in pre-profitable stage). Would the amount claimed on the 83(b) election be my starting basis?========>no not you starting basis; in general, within 30 days of a member/partner?s purchase of Equity the member/partner need to decide whether or not to make an election under Section 83(b); by making an election under Section 83(b) ,you choose to have the federal income tax treatment of its purchase of the Equity determined at the time of ?transfer? rather than at some later date when unrestricted ownership of the Equity ?vests.as you made the election, yiu must include as compensation income for the year of transfer the fair market value of the Equity at the time of transfer as you said you did not contribute anthing to the LLC.so,there will be no U.S. federal income tax consequences at the time when the Equity vests. When subsequently sell or otherwise dispose of the Equity in a taxable transaction, any appreciation in the value of the Equity since you acquired it under the Section 83(b) Election generally will be taxed as capital gain, rather than ordinary income.but without the electon, in any taxable year in which Equity vests you will be required to include in your gross income as ordinary income.


It would seem to me that the amount I claimed on the 83(b) election is the amount of income I am declaring these shares to be worth and received as income, which is really my contribution to the firm=>>As mentioned above it depends.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
S corp election klatu For 2013 0 10-30-2013 11:33 AM
What can a Taxpayer do if they only filed a Federal S Corporation Election but did not File a CBT-2553 "New Jersey S Corporation Election?" TaxGuru New Jersey 0 07-30-2013 04:20 PM
LLC Tax Election - Help Please ak0124 Limited Liability Company 0 02-27-2012 11:11 PM
What exactly is a 83(b) Election? Leah Filing Requirements 0 03-04-2008 08:29 PM
S corporation Election?? JCrawford C-Corporation 1 01-18-2007 10:33 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.