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Section 83(b) election: the 30-day deadline, Form 15620, statement contents and forfeiture

Reviewed 2026-09-15 · AI-assisted draft and editing; sources and limitations remain visible for independent review.

Answer: Section 83(a) taxes property transferred in connection with the performance of services when the recipient's rights first become transferable or are no longer subject to a substantial risk of forfeiture, whichever occurs earlier, measuring the fair market value at that later moment. Section 83(b) lets the person who performed the services elect instead to include, for the year of transfer, the excess of the property's fair market value at the time of transfer, determined without regard to any lapse restriction, over the amount paid for it. The statutory rule on timing is that the election shall be made not later than 30 days after the date of the transfer, and that it may not be revoked except with the consent of the Secretary. Reg. 1.83-2 supplies the mechanics: what the signed statement must contain, that it is filed with the internal revenue office where the service provider files a return, that a copy goes to the service recipient, and that revocation is granted only for a mistake of fact about the underlying transaction. Form 15620 is a standardized way to make the election and its use is voluntary; a written statement that satisfies the regulation remains available. What the election does not do is create a refund if the property is later forfeited.

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Scope

Jurisdiction: United States — federal

Tax periods: Not period-specific; checked 2026-09-15, 26 CFR revised as of April 1, 2025, Form 15620 revision 4-2025

Assumptions

Exclusions

1. What the election moves, and what it does not

The election changes the measuring moment. Without it, section 83(a) fixes the income at the first time the rights are transferable or not subject to a substantial risk of forfeiture, using the value then. With it, the amount taken into income is the excess of the value at transfer, determined without regard to any lapse restriction, over the amount paid, and Reg. 1.83-2(a) states that when the property later becomes substantially vested no compensation is included in gross income at that time.

Reg. 1.83-2(a) also states the basis consequence: in computing gain or loss on a later sale or exchange, basis is the amount paid for the property increased by the amount included in gross income under section 83(b).

The forfeiture rule is the part that decides most close cases. Under Reg. 1.83-2(a), if property for which an election is in effect is forfeited while substantially nonvested, the forfeiture is treated as a sale or exchange on which the loss is the excess of the amount paid for the property over the amount realized on forfeiture, and where the property is a capital asset in the taxpayer's hands that loss is a capital loss. The amount previously included in income is not recovered through that loss. An election therefore accepts a present, non-refundable tax cost in exchange for a different treatment of later appreciation.

On the payer's side, section 83(h) allows a deduction equal to the amount included in the service provider's gross income under section 83(a), (b) or (d)(2), for the payer's taxable year in which or with which ends the service provider's taxable year of inclusion. The election accelerates that deduction along with the inclusion.

2. The 30-day rule, stated as a rule

Section 83(b)(2) provides that the election shall be made in the manner the Secretary prescribes and not later than 30 days after the date of the transfer. Reg. 1.83-2(b) states the same period and adds that the statement may be filed prior to the date of transfer. This is the rule and its source; whether a given transfer has occurred, and on what date, is a fact question addressed by Reg. 1.83-3(a).

The instructions to Form 15620 state that under section 7503, if the thirtieth day falls on a Saturday, Sunday or legal holiday, the election is considered timely filed if it is postmarked by the next succeeding day that is not a Saturday, Sunday or legal holiday. That is a general timing provision applied to this election, not a separate grace period.

Two things the rule does not say are worth writing into the file. It does not provide a late-election procedure inside the regulation, and it does not condition the period on when the recipient learned of the transfer. Anything beyond the stated period is a separate research question about relief, not an application of Reg. 1.83-2(b).

3. Confirm there is a transfer and a substantial risk of forfeiture

An election presupposes a transfer of property that is substantially nonvested. Reg. 1.83-3(a)(2) states that the grant of an option to purchase certain property does not itself constitute a transfer of that property, so the analysis for an option grant starts in a different place than the analysis for a share of restricted stock.

Reg. 1.83-3(c)(1) defines the risk. Whether a risk of forfeiture is substantial depends on the facts and circumstances, and, with the exceptions identified in that section, a substantial risk of forfeiture exists only if rights in the transferred property are conditioned, directly or indirectly, on the future performance of substantial services or on a condition described in the regulation. Restrictions that merely lapse over time are treated differently from nonlapse restrictions, and section 83(a) values the property without regard to lapse restrictions.

If there is no substantial risk of forfeiture and the property is transferable, there is generally nothing for the election to accelerate, because section 83(a) already fixes inclusion at transfer. Record that conclusion in the file rather than filing an election reflexively.

4. The filing packet

Reg. 1.83-2(e) sets the content of the statement. It must be signed by the person making the election, must indicate that it is being made under section 83(b) of the Code, and must contain the name, address and taxpayer identification number of the taxpayer; a description of each property to which the election relates; the date or dates on which the property was transferred and the taxable year for which the election was made; the nature of the restrictions to which the property is subject; the fair market value at the time of transfer, determined without regard to any lapse restriction; the amount, if any, paid for the property; and, for elections made after July 21, 1978, a statement that copies have been furnished to the other persons identified in Reg. 1.83-2(d).

Reg. 1.83-2(c) states that the election is made by filing one copy of the written statement with the internal revenue office with which the person who performed the services files a return. Reg. 1.83-2(d) requires a copy to the person for whom the services were performed, and a further copy to the transferee of the property where the service provider and the transferee are not the same person.

Form 15620, Section 83(b) Election, revised April 2025, collects the same items in boxes and carries instructions that describe where to file it and which copies to furnish. Its own notice states that the form is provided for convenience and that its use is voluntary, and the instructions say an election may alternatively be made by filing a written statement that satisfies Reg. 1.83-2. Using the form does not change the substantive requirements, and the form does not eliminate the copy requirements.

5. Revocation is narrower than the word suggests

Section 83(b)(2) says the election may not be revoked except with the consent of the Secretary, and Reg. 1.83-2(f) states that consent will be granted only where the transferee is under a mistake of fact as to the underlying transaction, and that the request must be made within 60 days of the date on which the mistake of fact first became known to the person who made the election.

The same paragraph forecloses the most common request. It states that a mistake as to the value, or a decline in the value, of the property, or a failure to perform an act contemplated at the time of transfer, does not constitute a mistake of fact. The Form 15620 instructions repeat that an election may not be revoked except with the consent of the IRS and point to Reg. 1.83-2(f) and Revenue Procedure 2006-31 for the procedure; that revenue procedure was not opened for this page and should be read before any revocation request.

6. What would change the answer

Several facts move the analysis out of this page. A grant of an option rather than a transfer of property changes the starting point. A transfer that is already substantially vested removes the election's function. A qualified equity grant under section 83(i), added in 2017, provides a separate deferral regime with its own conditions and its own election. And a valuation that is contested changes the amount included without changing any of the mechanics above.

Hypothetical illustration, not a client matter: a service provider receives shares subject to a vesting condition and pays nothing for them, then leaves before vesting. If an election was in effect, the forfeiture is treated as a sale or exchange under Reg. 1.83-2(a) with a loss measured by the amount paid, which was nothing, less the amount realized. The earlier inclusion stays where it is. That asymmetry is the fact to put in front of a client before, not after, the period runs.

The sibling page Section 409A issue map: where nonqualified deferred compensation fails covers promises to pay compensation later rather than property transferred now; the two regimes share the phrase substantial risk of forfeiture but define and use it for different purposes. To trace how section 83 reached its current form, including the addition of section 83(i), ask Taxterity for an IRC Section History on section 83, then read the amendment notes on the statute itself before relying on them.

Related research

Official sources

  1. 26 U.S.C. 83 — Property transferred in connection with performance of services — Section 83(a) inclusion at transferable or no longer subject to substantial risk of forfeiture; 83(b)(1) and (b)(2) election, 30-day period and consent to revoke; 83(c)(1); 83(h); 83(i)
  2. 26 CFR 1.83-2 — Election to include in gross income in year of transfer (annual CFR page, 4-1-25 edition) — Reg. 1.83-2(a) effect, basis and forfeiture-as-sale rule; (b) time for making election; (c) manner of filing; (d) additional copies; (e) content of statement, items 1 through 7; (f) revocability
  3. 26 CFR 1.83-3 — Meaning and use of certain terms (annual CFR page, 4-1-25 edition) — Reg. 1.83-3(a)(1) and (a)(2), transfer and the grant of an option; Reg. 1.83-3(c)(1), substantial risk of forfeiture defined by facts and circumstances
  4. IRS Form 15620, Section 83(b) Election (Rev. 4-2025) — Page 2 instructions: Purpose of Form; Where To File; Additional Copies; Revocation of an 83(b) Election; Who May File; When To File, including the section 7503 weekend and holiday rule; Privacy Act notice on voluntary use

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