On December 7, the IRS issued Notice 2018-97, to provide much-needed guidance on qualified equity grants under Section 83(i). Before I blog about that guidance, I thought it would be helpful to review what qualified equity grants are.
The Tax Cuts and Jobs Act added Section 83(i) to the Internal Revenue Code, which allows privately held companies to grant a new type of vehicle called “qualified equity grants.” Here are ten things to know about qualified equity grants:
So that’s what qualified equity grants are in less than 500 words. For more information, check out these alerts by Trucker Huss and Wilson Sonsini.
I’ll cover Notice 2018-97 in a future blog entry, as well as why I think Section 83(i) is a trap. Can’t wait to learn about the notice? Check out the development I post today.
P.S.—You may be wondering what pocketwatches have to do with Section 83(i). I don't know: time, deferral, time value of money, etc.? Mostly I just think the picture looks cool. The idea of tax deferral is apparently not something stock photographers are aware of. Not only are there zero photos for the search term "tax deferral" but Adobe Stock suggested I must have spelled my search term wrong.
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