Restricted Property — Section 83 (Portfolio 384)


Matthew Eickman

National Retirement Practice Leader

Qualified Plan Advisors

At a glance

I. Introduction
II. Definition of Key Statutory Terms
III. Operation of §83
IV. Exceptions to Applicability of §83
V. Interrelationship of §83 with Other Provisions


Bloomberg Tax Portfolio, Restricted Property — Section 83, No. 384, examines the operation of §83 of the Internal Revenue Code of 1986, as amended, in taxing various types of transfers of property in connection with the performance of services. Section 83 is most often associated with transfers of “restricted property” (i.e., property that is transferred to an individual subject to forfeiture and other types of restrictions). Its scope, however, is far broader. The regulations make it clear that the term “property” under §83 applies to transfers of all types of property in respect of services other than cash, whether or not subject to restrictions. Section 83 applies to all service-related transfers of property and is not limited to the traditional, common law employer-employee relationship. This Portfolio focuses on the critical terms in §83 and upon the typical transactions to which §83 applies. It also examines the federal income tax consequences of such arrangements to both employers and employees.

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