If you’re dreading April 15 due to a big tax bill- it could be worse. Facebook’s IPO made founder Mark Zuckerberg a billionaire — but left him with a tax bill likely to top $1 billion. Here’s the story from the CNN news feed.
Facebook’s stock market debut left founder and CEO Mark Zuckerberg with a paper fortune currently valued at $13 billion — and a 2012 tax bill of around $1.1 billion.
Zuckerberg’s whopping tax hit stems from his move last May to increase his stake in Facebook. On the day of Facebook’s initial public offering, Zuckerberg exercised a stock option and purchased 60 million Facebook shares at a “strike price” of 6 cents each.
Even if those shares are never sold, the IRS treats them as ordinary income at the time the options are exercised. The rationale is that such options are a form of compensation, just like regular wages.
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David Conley
He is also a founding Board Member and Finance Director of the Fayette Pregnancy Resource Center and serves on the Board of the National Equal Rights Institute.
Latest posts by David Conley (see all)
- Should you be paying “your fair share”:
We destroy another tax myth with facts
- March 20, 2019 - Cliff notes of the new tax law:
Our cheat sheet guide to tax reform
- March 16, 2019 - March madness-tax humor:
Bracket can be in the eye of the beholder
- March 10, 2019
