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by patio11
4499 days ago
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Bingo. Works the same way for shares. Unless you're investing in a tax-advantaged account, if you have a $10k basis in a stock/fund and liquidate it for $20k, you just realized a $10k gain regardless of what subsequently happens to that $20k. Park it at your brokerage, plow it into a new stock, withdraw it and buy a vat of chocolate to go skinny dipping in, the IRS doesn't care, but it will have its cut. Poorly timed realizations of capital gains used to routinely bankrupt people in the startup community, which is why that 83(b) election paperwork is actually really important. |
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Just a friendly reminder if someone is reading this - you have 30 days to claim 83(b) after you offer yourself shares in your business, otherwise you'll be in a heap of legal/tax issues that can be quite painful (i.e. cost a lot). Make sure you bring this up with your accountant/lawyer.