Which of the Following Is False Regarding a Section 83(b)

question 88

Multiple Choice

Which of the following is false regarding a section 83(b) election?

• A) If an employee leaves before the vesting date, any loss is limited to $3,000.
• B) The election freezes the value of the employee's compensation as of the grant date.
• C) The election must be made within 30 days of the grant date.
• D) The election is an important tax planning tool if the stock is expected to increase in value.

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Definitions:

Net Loss

This occurs when a company's expenses exceed its revenues during a specific reporting period, resulting in a negative profit.

Net Income

The remainder of a company's revenue after deducting all expenditures and taxes, known as net profit.

Consolidated Financial Statements

Consolidated Financial Statements present the financial position and performance of a parent company and its subsidiaries as a single entity, merging their individual statements into one comprehensive document.

Subsidiary

A company that is completely or partially owned and controlled by another company, known as the parent company.