The IRS recently issued final regulations clarifying the meaning of substantial risk of forfeiture under Section 83 of the Internal Revenue Code. For the most part, the final regulations are consistent with past regulations and interpretations. However, the clarification eliminates some of the previous “wiggle room” in the regulations, thereby making it harder to defer tax. The regulations apply to any property transferred on or after January 1, 2013.
Previously, under Regs. Sec. 1.83-3(c)(1), “a substantial risk of forfeiture exists where rights in property that are transferred are conditioned, directly or indirectly, upon the future performance (or refraining from performance) of …read more
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