Start-Up Corporation issues 100,000 shares of stock to CEO. CEO pays $1 per share, which is determined to be the FMV at the time of transfer. If CEO does not complete 3 years of service with Start-Up, he will forfeit the shares back to Start-Up and will be paid the lesser of $1 per share or the FMV as of the date of forfeiture. The stock has a legend stating that it is not transferable and is subject to an employment agreement.
When CEO completes 3 years of service, the FMV of the stock is worth $100 per share.
CEO sells his shares for $150 per share 2 years after vesting pursuant to a change in control

QUESTIONS

Is the issuance of stock to CEO considered in connection with the performance of services?
Is there a transfer?
Is the stock transferable?
Is there a substantial risk of forfeiture?
What are the tax consequences if CEO does not make an 83(b) election on:
Date the CEO receives the stock?
Date when three years of service are completed?
Date of sale?

Answer rating: 100% (QA)

Is the issuance of stock to CEO considered in connection with the performance of services Yes the is... View the full answer