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

question 22

Multiple Choice

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

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

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Definitions:

Yield

A measure of materials usage efficiency.

Equivalent Units

A concept used in process costing that converts partially completed units into a number of fully completed output units.

Manufacturing Cells

A layout design in manufacturing where machines and workers are grouped together to produce a specific product or component.

Conversion Costs

Costs required to transform raw materials into finished products, combining direct labor and manufacturing overhead.