How do I note capital losses on stock earned via employment in 2017, elected under Section 83(b), and lost (i.e., sold for a value of $0) in 2020?

Under the tax rules, unless you timely file an 83(b) election (per IRS, within 30 days of date of election/grant date), you will be taxed on the fair market value of stock that is subject to a substantial risk of forfeiture only when it becomes vested (e.g., no longer subject to the company's right of repurchase or forfeiture). On the vesting date, the fair market value of the shares that have vested (less the value of any property contributed or cash paid for the shares) will be treated as compensation income and therefore subject to ordinary income tax and applicable income and employment tax withholding.

Per the SEC:

General Treatment of Restricted Shares

You generally will not be subject to federal income tax upon the issuance of Restricted Shares in the Exchange Offer. If you do not make a Section 83(b) election for the Restricted Shares (discussed below), your taxable income with respect to those shares will be calculated, and tax will be owed at ordinary income rates, in the year in which the Restricted Shares vest. The amount of taxable income will be equal to the number of vested shares multiplied by the market price per share on the date the shares vest.

Your adjusted tax basis in the shares will be the fair market value of the shares on the date they vest, and the holding period for the shares will begin just after they vest. Any gain or loss recognized when the Restricted Shares that have vested are sold will be capital gain or loss, and will be long-term capital gain or loss if the vested shares have been held for more than one year at the time of sale.

Any dividend payments received with respect to Restricted Shares for which a Section 83(b) election is not made will be taxed as ordinary income during the period that the Restricted Shares are unvested, and will not be treated as qualified dividend income. Any dividends received prior to 2011 with respect to vested shares may be qualified dividend income subject to a current maximum federal tax rate of 15 percent, provided certain other requirements are satisfied.

Section 83(b) Election

You may, however, accelerate the date on which the Restricted Shares are subject to ordinary income rates, and therefore the date in which all appreciation in value will be taxed as capital gain, by filing a Section 83(b) election. This election must be made within 30 days after the date of issuance of the Restricted Shares.

If a Section 83(b) election is made for the Restricted Shares, then the amount of taxable income will be calculated, and tax will be owed at ordinary income rates, in 2009. The amount of taxable income will be equal to the number of Restricted Shares received in the Exchange Offer multiplied by the market price per share on June 26, 2009 (i.e., on the date of issuance).

Your adjusted tax basis in the shares will be the amount recognized as ordinary income on the date of issuance, and the holding period for the shares will begin just after the issuance date. Any gain or loss you recognize when you sell the Restricted Shares that have vested will be long-term capital gain or loss.

Any dividends received with respect to Restricted Shares prior to 2011 for which a Section 83(b) election is made may be qualified dividend income subject to a current maximum federal tax rate of 15 percent, provided certain other requirements are satisfied.