1. By when does the 83(b) election have to be made?

a. By 30 days after the transfer (not vesting) of the partnership interest.

b. More than 30 days after the transfer (not vesting) of the partnership interest.

c. More than 30 days after the vesting of the partnership interest.

d. By 30 days after the vesting of the partnership interest.

2.What are the tax effects if a 83(b) election is made by a service partner if they get a partnership capital interest that is not vested?

a. Delayed recognition of the FMV of the partnership interest as income. Continued income from the exchange when it does vest.

b. Immediate recognition of the FMV of the partnership interest as income. No further income from the exchange when it does vest.

3.What are the two benefits of making a 83(b) election in the case of a nonvested capital interest exchanged for services? (select all that apply)

a. Avoid recognizing subsequent appreciation.

b. Future distributions are not recognized as compensation (without Code Section 83(b) election, they might not be considered a partner until the interest vests).

c. If the interest is subsequently forfeited, a deduction for any loss is still allowed.

4. If a capital interest in a partnership is received for services, what are the tax effects on the service partner, the continuing partners, and the partnership?

Service partner( )

Continuing partners( )

Partnership( )

ture or false:

1. When an S corporation shareholder exchanges services for shares in the S corporation, the shareholder must recognize income equal to the value of the stock received and will have a basis in those shares equal to the amount included in income.

2.If the capital interest is not vested, the service partner will recognize the income from the receipt of the partnership interest when it becomes vested, equal to its value when it is vested.

deduction and gain recognized and passed to continuing partners deduction for services if they are not required to capitalize them, and gain on the sale of service partner's share of p recognize FMV of interest as income, get a stepped-up basis in share of partnership assets