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Posted on 02/03/2012 6:10:20 PM PST by Steelfish
Mark Zuckerberg’s $2 Billion Tax Bill
By Robert Frank
Buried in the registration statement of Facebook’s IPO was this startling line:
“We expect that substantially all of the net proceeds Mr. Zuckerberg will receive upon such sale will be used to satisfy taxes that he will incur upon his exercise of an outstanding stock option to purchase 120,000,000 shares of our Class B common stock.”
What that means, in dollar terms, is that Facebook founder Mark Zuckerberg may face a tax bill this year of more than $2 billion. The Financial Times puts the figure at $1.5 billion. But if the IPO values the company at the hoped-for $100 billion, his bill could be higher.
Facebook declined comment. But here’s the math. Zuckberberg received the 120 million options in 2005, presumably for being CEO and being, well, Mark Zuckerberg. Those options will be treated as ordinary income, which means he would pay the top federal income tax rate of 35%.
The cost basis for those options is six cents a share. So if the company is valued at $100 billion, and the shares are valued at around $50 each, his gain from the sale would be up to $6 billion. Taxed at 35%, the tax bill would be more than $2 billion. The FT puts a more conservative value on the company for its $1.5 billion total.
(Excerpt) Read more at blogs.wsj.com ...
Of course, Rachel Maddow will still insist that people like Zuckerberg are not paying their "fair share". And any possible discussion of tax cuts for the US will result in Michael Moore demanding that the government "stop giving money" to people like Zuckerberg.
Assuming, for the sake of discussion, he writes the IRS a check for the $2 billion, at the rate Congress spends money, it will be gone in about five hours.
What “sale” are they talking about?
He’s a little leftist fascist. Take all his billions and let him rent my shed out back.
He is too ignorant to understand Capitalism. He will never touch the business genius of Mellon or Rockefeller.
Thorton Mellon Rules
I agree..that ass clown is a loony Obama-ass kissing libtard.
He was one of the first to to the WH after Obama won. No sympathy from me so pay up rich boy and pony up your fair share to your clown hero Odumbo.
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