IRC Section 83 affects many types of transactions, but it most frequently dictates the tax treatment of various forms of deferred compensation, including stock grants. Section 83 provides generally that if property is transferred to a person in connection with the performance of services, the excess of the fair market value of the property at the first time the transferee’s rights in the property are transferable or are not subject to a substantial risk of forfeiture over the amount (if any) paid for the property is included in that person’s gross income.

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