(b) sold all your shares (was practically impossible for FB employees before 2nd market and friends came along; still mostly impossible for employees in most companies until 6 months after IPO or acquisition)
(c) have realized capital gains in the year(s) following that loss (I don't recall the exact details, but you can net the full loss for 3 years, and then less and less until nothing at all in 7 years or so).
Now, let's look at a more typical case:
You start to work at facebook the day of the IPO; you are awarded 10,000 RSUs at $38 each. That's $380,000 right there; If you make an 83(b) election (to start the capital gains clock ticking), you just scored $380,000 in the "other income" (or even "salary") columns. If you're in high tax place, like NYC, that's 48% in marginal rate (which is not unlikely -- although, assuming you were unemployed, and this all happened on 31-dec, would "only" be 43% or so ....): 35% federal + 8% NY state + 5% NYC. So you just incurred a tax bill of $180,000 of money you never got.
Now, you can get fired the next day. The shares have been forfeited. You do not have a capital loss in that case. Just a $180,000 tax bill with NO income or credit to offset it, regardless of what happens to the stock.
But let's say you stay working for the whole vesting period. Except the whole time you can actually sell them, they are at $16. You're still $20K out of pocket at the end of the period, after selling everything. (And whatever the interest and opportunity costs for spending those $180K on taxes).
But in this case, if you make a huge capital gain profit sometime in the next three years, you'll be able to take credit for your losses - of having bought the RSUs at $38 and sold them at $16 - a loss of $220K.
Oh, and you often have to pay for RSUs, so your losses are larger (although unlike options, that's not mandated by law, and FB could give them to you "for free").
So, no, you don't want to turn the capital gain clock on RSUs unless the shares are essentially worthless at the time of the 83(b) election [or otherwise have no way of siginficantly losing value, and have a good probability of gaining value).
By all means, you should do an 83(b) election when founding the company (if it is needed and makes sense) - on week one, when the value of the company is $5000, it makes sense to pay taxes on your 25%=$1250. But a few months later, when you're raising money at a $1M valuation, that's the value the IRS will want to see on your 83(b) election.
(a) vested all shares (usually 2-3 years)
(b) sold all your shares (was practically impossible for FB employees before 2nd market and friends came along; still mostly impossible for employees in most companies until 6 months after IPO or acquisition)
(c) have realized capital gains in the year(s) following that loss (I don't recall the exact details, but you can net the full loss for 3 years, and then less and less until nothing at all in 7 years or so).
Now, let's look at a more typical case:
You start to work at facebook the day of the IPO; you are awarded 10,000 RSUs at $38 each. That's $380,000 right there; If you make an 83(b) election (to start the capital gains clock ticking), you just scored $380,000 in the "other income" (or even "salary") columns. If you're in high tax place, like NYC, that's 48% in marginal rate (which is not unlikely -- although, assuming you were unemployed, and this all happened on 31-dec, would "only" be 43% or so ....): 35% federal + 8% NY state + 5% NYC. So you just incurred a tax bill of $180,000 of money you never got.
Now, you can get fired the next day. The shares have been forfeited. You do not have a capital loss in that case. Just a $180,000 tax bill with NO income or credit to offset it, regardless of what happens to the stock.
But let's say you stay working for the whole vesting period. Except the whole time you can actually sell them, they are at $16. You're still $20K out of pocket at the end of the period, after selling everything. (And whatever the interest and opportunity costs for spending those $180K on taxes).
But in this case, if you make a huge capital gain profit sometime in the next three years, you'll be able to take credit for your losses - of having bought the RSUs at $38 and sold them at $16 - a loss of $220K.
Oh, and you often have to pay for RSUs, so your losses are larger (although unlike options, that's not mandated by law, and FB could give them to you "for free").
So, no, you don't want to turn the capital gain clock on RSUs unless the shares are essentially worthless at the time of the 83(b) election [or otherwise have no way of siginficantly losing value, and have a good probability of gaining value).
By all means, you should do an 83(b) election when founding the company (if it is needed and makes sense) - on week one, when the value of the company is $5000, it makes sense to pay taxes on your 25%=$1250. But a few months later, when you're raising money at a $1M valuation, that's the value the IRS will want to see on your 83(b) election.