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Does 83(b) cause a tax liability when exchanging startup stock for public stock?
I was told by the lawyers there was no tax consequence because the two   numbers were the same. That is correct. However, a tax professional tells me that since the start-up stock was   "realized" there invokes a taxable event now. That is correct. I'm now led to believe I owe cap-gains tax on the entire 4 year vest   this year That is incorrect. You owe capital gains tax on the sale of your startup stock. Which is accidentally the exact same amount you "paid" for the new unvested stocks. There's no taxable event with regards to the new stocks because the amount you paid for them was the amount you got for the old stocks. But you did sell the old stocks, and that is a taxable event.