Recommend Our Site to Your Friends!

Print This Page

Subject:   question
Date:   12 Nov 2003
From:   Erik

Dear Sir,

We are two Dutch nationals about to form a Delaware corporation.

We are considering filing an 83(b) election because we want to attract investors.

We are also considering moving to the States, in which case we would become US taxable, but this is not certain.

Does filing an 83(b) election mean that we will be taxable in the States when selling our stock, even if we are not taxable in the States?

I thank you very much for your answer.

Kind regards,
Erik

Answer

Date:   24 Nov 2003

Hello Erik,

The § 83(b) election relates to property received in connection with employment. It doesn't have anything to do with attracting investors.

Whether you will be subject to US tax relates to whether you are a US resident or are compensated for services rendered in the US.

You really should find a tax advisor who knows US tax law to work with. Since you are Dutch nationals, you have special problems that favor retaining an international accounting firm.

Good luck!

Mike Gray

For more answers to our readers' questions and to learn about new tax developments relating to employee stock options, subscribe to our newsletter, Michael Gray, CPA's Option Alert!

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.