Do I need to file a Section 83(b) election?

Question

I just left my company (which is still privately held), and I wanted to exercise my stock options. Along with the forms, there's some forms about Section 83(b) Election, but I'm a little bit lost in all the legal jargon. Do I need to do this? My stock options are ISO and I'm only purchasing vested options. So, do I need to do anything with the Section 83(b) election? Or can I ignore it since I'm only purchasing vested shares?

Answer 1

Section 83(b) elections only apply to restricted stocks. You're not purchasing stock options, but the stocks themselves. Since the stocks are vested when you acquire them based upon what you say, Section 83(b) does not apply.

Here's a link with a good explanation of Section 83(b) elections and when and why you would want to make one: http://www.fairmark.com/execcomp/sec83b.htm