Map the income timing for property transferred for services
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- Build a table of the property, the amount paid, the transfer date, and the facts in the papers about whether the rights are transferable or are conditioned on future services. Do not compute the income and do not prepare an election.
- What the lawyer must review
- 26 U.S.C. § 83: if property is transferred in connection with the performance of services, the excess of its fair market value, determined without regard to any restriction other than a restriction which by its terms will never lapse, at the first time the rights are transferable or are not subject to a substantial risk of forfeiture, over the amount paid, is included in the income of the person who performed the services in that year. Rights are subject to a substantial risk of forfeiture if the right to full enjoyment is conditioned upon the future performance of substantial services by any individual. Rights are transferable only if the rights of a transferee are not subject to a substantial risk of forfeiture. You decide whether the section applies. Do not treat this section as the rule for nonqualified deferred compensation or for a statutory option. Those are other sections, which you open. Do not state an election deadline.
- Written for / version
- United States versionUSCth
Who does what
| Role | What they do |
|---|---|
| Assistance | Consider narrowly defined preparation support after confirming the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Calculate operative dates independently from the current rule and actual triggering event. Check exceptions and record the verified deadline.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.