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I have read your question in detail. Let me try and help you with your question.
1. When you talk of making 83b selection ---- As you are aware, Under Section 83 of the Internal Revenue Code
, the founder/employee would not recognize income (the difference between fair market value and the price paid) until the stock vests. However, if a founder/employee makes a voluntary Section 83(b) election, the founder/employee recognizes “income” upon the purchase of the stock.
Typically, the purchase price for the stock and the fair market value are the same. Therefore, if an 83(b) election is made, there is no income recognized. Thus, a founder/employee should almost always make an 83(b) election.
The benefits of an 83(b) election generally are starting the one year capital gain holding period and freezing ordinary income (or alternative minimum tax
) recognition to the purchase date.
If the founder/employee does not make the 83(b) election, then he or she may have income at the stock “vests.” The income will be substantial if the value of the shares increases substantially over time. So, your assumption with reference to point 1 is correct.
2. Again YES. If your possibilities of being laid off are higher and the fair market value is likely to increase manifold, just as you mention in your question. It would be more beneficial to have the restricted shares vest before the NSOs
3. So far as making counter offers goes, employers usually are rigid with what they offer. However, it is always wise to split your risk 50-50.I mean you can ask of 1% in restricted shares and 1% in ISO and so on. NSO are risky but moderately risky not much.
I am sure this would help.
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