Zuckerberg's 2011 Personal Income Tax Bill: $1.5 Billion

CommanderFrank

Cat Can't Scratch It
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There will not be too many tears shed for Mark Zuckerberg when he pays his share of the US tax bill of $1.5 Billion bucks to Uncle Sam, No sir, not one crocodile tear among the bunch of us. He’ll just have to scrimp and save to pay his bill just like everyone else. Next year Mark, itemize your deductions. :D

As a result of the convoluted morass that is the US tax code, the profits that Zuckerberg will realize from excercising his options will be taxed as regular income, and not as capital gains
 
I call BS on this

"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."

It's nice to know that Zuckerberg's wealth-management team is thinking ahead.

Those 120 million fully vested options that Zuckerberg plans to exercise, by the way, will cost him 6¢ per share. Remember that pittance when you read news of Facebook's stock price on IPO day, which has yet to be scheduled.
120,000,000 shares x $0.06 per share = $7.2million, he's probably got that much in pocket change, why would he need to sell off much of any stock to buy those back?
 
That's an insane amount of money going down the US drain. Too bad it can't somehow go to a charity or something.:p
 
That's an insane amount of money going down the US drain. Too bad it can't somehow go to a charity or something.:p

It is going to charity...welfare, Pakistan, Afghanistan, Iraq, bank bailouts...

Shouldn't you be curling or something rather than poking fun at the U.S.?
 
I call BS on this


120,000,000 shares x $0.06 per share = $7.2million, he's probably got that much in pocket change, why would he need to sell off much of any stock to buy those back?

He's smart and cashing out while he can. The writing is on the wall with Facebook...it's gargantuanly overvalued and is going to see a major price correction when this new bubble bursts before long.
 
Also worth noting is his actual income is posted at the bottom of the article:

According to the Facebook's S-1 filing, his 2011 compensation package totaled $1,487,362: $483,333 in salary, a $220,500 bonus, and $783,529 in "other compensation"

Cash in hand he made $703,833 for the year. Still part of the top 1%, but hardly the "millions are pocket change" he's made out to be. Granted this doesn't include any savings, it's just the single year income we're talking about here.
 
Normally you don't count income unless the stocks from the exercised grants are sold. If held over a year after exercised then the profit, if any, is taxed at 15%. He'll have a good tax lawyer, so he won't be paying any 1.5 billion.
 
There will not be too many tears shed for Mark Zuckerberg when he pays his share of the US tax bill of $1.5 Billion bucks to Uncle Sam, No sir, not one crocodile tear among the bunch of us. He’ll just have to scrimp and save to pay his bill just like everyone else. Next year Mark, itemize your deductions. :D

I understand he's new at being uber-rich and stuff, but he really needs to get a rich-person accountant. They could probably shave off a good 900 million or so in tax cost!
 
But...but...the 1% don't pay their fair share!!!!

Not to turn this into a political thread, this is a rare exemption.

Most rich people know people who know how to cheat their taxes or move money in a way. Hell, Romney is in the 15% bracket for $40million/year. That's lower tax percentage than me!

When Paulson took the job with the treasury, he saved $54million off his tax bill for that fiscal year because of a loophole that allowed private-to-public tax breaks.
 
Not to turn this into a political thread, this is a rare exemption.

Most rich people know people who know how to cheat their taxes or move money in a way. Hell, Romney is in the 15% bracket for $40million/year. That's lower tax percentage than me!

When Paulson took the job with the treasury, he saved $54million off his tax bill for that fiscal year because of a loophole that allowed private-to-public tax breaks.

Loopholes aren't cheating...
 
Most rich people know people who know how to cheat their taxes or move money in a way. Hell, Romney is in the 15% bracket for $40million/year. That's lower tax percentage than me!.

It is your right to pay the least amount of tax as possible.
 
How is he worth 17.5 billion (according to Forbes)when using some of the numbers mentioned in this thread?


Also, Facebook only made 400 million in 2011 according to their newly released S1 document(s). So this is far far off it's in Uranus.
 
He's smart and cashing out while he can. The writing is on the wall with Facebook...it's gargantuanly overvalued and is going to see a major price correction when this new bubble bursts before long.

If that's the case, then ok the article is correct on what kind of taxes he'll pay. What I was calling BS on was the statements made in the article as to why he'd be cashing out, which as the math shows he'd hardly have to sell any stock to achieve his goal of buying up that much common stock. And if he's wants to buy that much common stock he's not cashing out on anything. Bottom line Zuckerberg won't be paying anywhere close to 1.5 billion in taxes.

Hell that whole article is rife with retardation, from the statement that he'd need to sell nearly $4.6billion of stock (where the taxes come from) to buy $7.2 million in stock, to the end where it says don't feel sorry for him, because he'll make more than a million bucks... yeah a billion and million are almost the same thing, so he's not gonna lose out anyways.

What's the skinny on how long a "long-term" capital gains tax? Oh yeah ONE YEAR, he's going to be holding onto that stock for at least another 365 days to save 3/4s of a billion dollars in taxes.




Loopholes aren't cheating...
True they're not, however judging by how many people bitched and moan about "50% of the country didn't even pay taxes" (again due to loopholes) you'd think it was.
 
He's smart and cashing out while he can. The writing is on the wall with Facebook...it's gargantuanly overvalued and is going to see a major price correction when this new bubble bursts before long.

Smart man, well said.

People who study this so-called "social networking" fad will see they will all crash and burn in the end.

Short the living SHIT out of FB stock, I just cannot wait to rake in the dough when it tanks :) hehehehe, so obvious.
 
People who study this so-called "social networking" fad will see they will all crash and burn in the end.

Short the living SHIT out of FB stock, I just cannot wait to rake in the dough when it tanks :) hehehehe, so obvious.

Don't you have to pay shorts back at current market value within a few months, at absolute most? This thing could ride high for three plus months to a year before it tanks! It's completely logical to say it will tank one day as even our Sun will (technically) end one day (all stocks crash and rise). What I can't grasp yet is how some of you seem to know it will do it on day one (or month one for that matter)?

Like sfsuphysics stated above. Mark Z must hold his shares for one year for tax reasons. He should (I assume) at least have a business model to get him through the year...lol. My point: I personally think you'd lose money shorting this stock right out of the gate but that's just my personal opinion.
 
Loopholes aren't cheating...

"LOOPHOLES" are another for, of gov't welfare for people/companies....Created by the very politicians to pander to the electorial base.

Major tax reform is needed...not a tax code where 47% of the population pays no INCOME tax (Not counting SS and Medicare payroll taxes, which all of us pays) or gets a refund...and where teh rich people only pay a 15% tax rate on capital gains because they have no income...

the 1986 Tax deal is a foundarion where the govt can look at broadning of the base, closing loopholes for the tax cheaters and lower the rates for everyone...Fair and pretty easy to do...
 
"LOOPHOLES" are another for, of gov't welfare for people/companies....Created by the very politicians to pander to the electorial base.

Major tax reform is needed...not a tax code where 47% of the population pays no INCOME tax (Not counting SS and Medicare payroll taxes, which all of us pays) or gets a refund...and where teh rich people only pay a 15% tax rate on capital gains because they have no income...

the 1986 Tax deal is a foundarion where the govt can look at broadning of the base, closing loopholes for the tax cheaters and lower the rates for everyone...Fair and pretty easy to do...

Capital gains and dividends are hardly a loophole. The 15% tax rate is misleading as it is a double tax. The company's profits have already been taxed at the corporate rate and any capital gains or dividends are then taxed again at the individual level.

The real problems happen with companies like GE or GM get in bed with the government and you get major corruption. How else do you think GE was able to pay nothing in taxes last year?

A flat tax and no subsidies sounds like the solution if you ask me :D, but then again nobody asked.
 
The $1.5 billion is for 2012, not 2011, and based on his number of shares and projected IPO prices.
 
Capital gains and dividends are hardly a loophole. The 15% tax rate is misleading as it is a double tax. The company's profits have already been taxed at the corporate rate and any capital gains or dividends are then taxed again at the individual level.
.
Umm you can make that same argument with a salary too

Capital gains are an "income" for an individual, as they are only taxed based upon the value at cash-out (in the case the stock tanked), but they're charged at a rate of only 15%.
 
Your dependant child deduction, mortgage interest deduction, student loan interest deduction, etc... are "loopholes".

"LOOPHOLES" are another for, of gov't welfare for people/companies....Created by the very politicians to pander to the electorial base.

Major tax reform is needed...not a tax code where 47% of the population pays no INCOME tax (Not counting SS and Medicare payroll taxes, which all of us pays) or gets a refund...and where teh rich people only pay a 15% tax rate on capital gains because they have no income...

the 1986 Tax deal is a foundarion where the govt can look at broadning of the base, closing loopholes for the tax cheaters and lower the rates for everyone...Fair and pretty easy to do...
 
Don't you have to pay shorts back at current market value within a few months, at absolute most? This thing could ride high for three plus months to a year before it tanks! It's completely logical to say it will tank one day as even our Sun will (technically) end one day (all stocks crash and rise). What I can't grasp yet is how some of you seem to know it will do it on day one (or month one for that matter)?

Like sfsuphysics stated above. Mark Z must hold his shares for one year for tax reasons. He should (I assume) at least have a business model to get him through the year...lol. My point: I personally think you'd lose money shorting this stock right out of the gate but that's just my personal opinion.

Of course I wouldn't short it right out of the gate, but watch.... like I said, in a few years you will see it MUCH lower. Mark my words. lolololol, so obvious
 
Of course I wouldn't short it right out of the gate, but watch.... like I said, in a few years you will see it MUCH lower. Mark my words. lolololol, so obvious


I don't care about a few years from now...lol. What I want/need/desire/hope to know is what it'll do for the first 1-3 months or even up to the one year mark (how long Zuck has to hold his shares). Guesses?

The rest of FB's future is meh! Of course it won't last, it's a social site.
 
As a tax preparer, there are loopholes on both sides of the income spectrum. Both ends will try to pay as little taxes or get as large of a refund as possible. In my experience, it's usually the ones in the middle of both ends of that spectrum usually getting screwed in terms of taxes and tax returns.

On one end, someone with low income can get upwards of $9,000-plus in a refund just by having children. That's one loophole. You basically earn no more than $20,000 to $22,000, and have at least two or three children. On the other end, someone with large amounts of income can vie for a lower tax bracket (10% or 15%), have large amounts of itemized deductions, mortgage interest on a house, and a lot more depending on their income sources. Investment income that's taxed on capital gains is one thing. You can earn $10,000,000 on investments, get taxed at 15% on that amount, while still having an earned income of $100,000 or less. Something like that.

It's the sad reality of our disjointed and lopsided tax code.

The ones in the middle usually get between $500 to $3000 refund on average from the tax returns I've done. If there isn't a refund, almost always they will be paying the IRS between $10 to $5000 on their tax returns. These are for incomes between $23,000-ish (or slightly lower) to $80,000. Their only hope for not paying so much or getting a smidgen of a refund is either of the following:
  1. Have more than two or three children.
  2. Own a house with large interest paid on the home.
  3. Large amounts of itemized deductions outside of paying a mortgage on a house.
Most of those filing their returns that owe or have a small refund are either one of the following:
  • Single, no house, no children, moderate income (around $20,000 to $30,000).
  • Married, no house, rent an apartment, no children, high income (over $40,000 in income).
  • Live paycheck to paycheck, high exemptions on their W-4, rent an apartment, and earn $20,000 to $30,000, at least one child.
  • Single, high income (above $40,000), no children, no house.
  • Retired, large amounts of 1099-Rs (retirement income), SSA-1099s (Social Security), no home or paid off house. (Sad when a retired 65, 70-, or 80-something year old taxpayer has to pay $100 to $1000+ to the IRS and still has to file a return.)
 
The rest of FB's future is meh! Of course it won't last, it's a social site.

That's the part that pisses me off, investors with valuable and useful assets are investing into it because they ate the false hype and false infalted numbers FB has dished out thus far (850 million users is a lie, we all know its their html 3rd party Like app generating those hits on everyone elses website traffic, but of course its reporting back to them when people like the 3rd party page!)

That's the thing... they are basically scamming and nobody seems to realize, all the while gullible investors are putting hordes of money into it. The only good thing is they create a few jobs with that money, but a majority of it is overinflated profits for the FB Harvard-minded scammers.
 
I call BS on this


120,000,000 shares x $0.06 per share = $7.2million, he's probably got that much in pocket change, why would he need to sell off much of any stock to buy those back?

What are you trying to say? I may be misreading, but it sounds like you don't understand options.
 
Perhaps i'm in the minority on this but does anybody here find it immoral and just downright thievery that a government can take 1.5 billion dollars in taxes? What government service has Zuckerberg used that merits this?

I do care much for Mark but I disagree with such an amount. People should fear a government that tells its people that its going to take more from those who have more to give to them. Eventually the rich will move away and the government will be forced to take from the lower tier and then further down once that dries up.
 
Time to get a better CPA firm because if this is true, the one he has now isn't worth a shit.
 
Seriously, is Mark this stupid? Or, are his wealth managers that bad? It is nice that he is helping pay for government services and all, but it shows a certain lack of vision if he can't figure out how to manage his tax rate.

I am just waiting for someone to say something about all the jobs he could have created if he was able to keep that 1.3 billion (the guy employs something like 2000 people and probably will never need to hire many more). This guy should cash out as quick as he can and invest in a new venture that he can milk and cash out on. But the second time around get his corporation class and investor status properly defined.
 
Not to turn this into a political thread, this is a rare exemption.

Most rich people know people who know how to cheat their taxes or move money in a way. Hell, Romney is in the 15% bracket for $40million/year. That's lower tax percentage than me!

When Paulson took the job with the treasury, he saved $54million off his tax bill for that fiscal year because of a loophole that allowed private-to-public tax breaks.
That's where the FairTax comes in. No loopholes.
 
Loopholes aren't cheating...

Right, so say I am playing an online-game. We'll call it World of Economy Craft and I realize I can buy an item from an npc vendor for 1 gold and sell it back to him for 100 gold because of a mistake in the pricing. Now let's say I buy 1 million of that item and sell 1 million of that item back and end up having 100 million gold in the game where 100,000 gold was previously considered to be A LOT of money.

I get banned from this 'World of Economy' craft for cheating -- yet "I was only using a loophole in the game. Expoilting something that was obviously a bug with the system but its not my fault the bug is there. This other rich guy paid to have it put there". It's strange how the other gamers on the forum wouldn't support me and said I was a cheater and attempting to ruin the system/game/economy etc.

It's odd in this 'hypothetical' situation, we allow this behaviour in real life but not in an online game. Yes, indeed. "Loophole's aren't cheating. :p :cool:" and printing money would be "just a loophole" :p.
 
Perhaps i'm in the minority on this but does anybody here find it immoral and just downright thievery that a government can take 1.5 billion dollars in taxes? What government service has Zuckerberg used that merits this?

I'm could be a bit in agreement with your thinking only if I didn't bother to think it through a bit further. Sure, it does seem like an e-business uses a bit less resources from a society than a traditional brick and motor or transportation style business and that it doesn't use as many government services.

At least with Fedex you could say, they use security screening at airports when loading their goods onto planes, their cargo occasionally is inspected for drugs and contraband, their delivery trucks use countless roads millions of times a day to deliver the goods and those roads are maintained by the government. When they lay off workers after Christmas in the new years, the government provides its workers with social security. Government helps maintain the airports runways that FedEx planes use on a daily basis.

To an extent, a lot of elements of FedEx's business wouldn't really be possible without the continual large infrastructure investment from the government and amount of money spent on maintaining said infrastructure.

One might think this doesn't apply to Facebook because as an eBusiness, they don't really have delivery trucks using 'roads' per say. However, if you stop that think about it. You can say the same about Facebook but to a lesser degree. Facebook needs power to run all of its server. It needs power-lines to get the power to servers and a power plant to generate said power. Facebook also subsequently needs roads so telephone-pole-repair trucks can repair said power lines should a storm hit, etc etc. All of these things -- maintaining roads, the power grid, generating of power, etc are all subsidized by the government.

In reality, facebook would without the government need to make its own roads to and from the power plant to their servers, power poles to and from their power plant. Maintain their own security force/private army to protect the servers, roads and power poles. Create their own nuclear or coal powerplant, etc etc. In the event of Nuclear, establish their own trade agreements with countries exporting Uranium or in coal possible set up their own coal mine since yes, coal mines are often goverment subsidized too.

Long story short, Facebook does not directly use a service merritting $1.5 billion dollars in taxes but many not-very-protiftable industries facebook is reliant upon would more than likely cease to exist without subsidies from the government as investors would choose to invest in more profitable industries. Thus, Facebook would not be able to do business nearly as well, profitable or simply without government. Facebook in reality may not have come into existance without the society that supports it. Society being maintained to some degree by government.
 
I'm could be a bit in agreement with your thinking only if I didn't bother to think it through a bit further. Sure, it does seem like an e-business uses a bit less resources from a society than a traditional brick and motor or transportation style business and that it doesn't use as many government services.

At least with Fedex you could say, they use security screening at airports when loading their goods onto planes, their cargo occasionally is inspected for drugs and contraband, their delivery trucks use countless roads millions of times a day to deliver the goods and those roads are maintained by the government. When they lay off workers after Christmas in the new years, the government provides its workers with social security. Government helps maintain the airports runways that FedEx planes use on a daily basis.

To an extent, a lot of elements of FedEx's business wouldn't really be possible without the continual large infrastructure investment from the government and amount of money spent on maintaining said infrastructure.

One might think this doesn't apply to Facebook because as an eBusiness, they don't really have delivery trucks using 'roads' per say. However, if you stop that think about it. You can say the same about Facebook but to a lesser degree. Facebook needs power to run all of its server. It needs power-lines to get the power to servers and a power plant to generate said power. Facebook also subsequently needs roads so telephone-pole-repair trucks can repair said power lines should a storm hit, etc etc. All of these things -- maintaining roads, the power grid, generating of power, etc are all subsidized by the government.

In reality, facebook would without the government need to make its own roads to and from the power plant to their servers, power poles to and from their power plant. Maintain their own security force/private army to protect the servers, roads and power poles. Create their own nuclear or coal powerplant, etc etc. In the event of Nuclear, establish their own trade agreements with countries exporting Uranium or in coal possible set up their own coal mine since yes, coal mines are often goverment subsidized too.

Long story short, Facebook does not directly use a service merritting $1.5 billion dollars in taxes but many not-very-protiftable industries facebook is reliant upon would more than likely cease to exist without subsidies from the government as investors would choose to invest in more profitable industries. Thus, Facebook would not be able to do business nearly as well, profitable or simply without government. Facebook in reality may not have come into existance without the society that supports it. Society being maintained to some degree by government.

I agree with some of your points and understand that government definately has a critical role in any modern society. Having said this, my point was more towards Zuckerbergs personal income tax bill. Facebook as a corporate entity already pays these taxes. Your example about Fedex is spot on but remember that Fedex pays airport fees and taxes on every plane so they are paying for the security, runway, etc.

When companies layoff after christmas the government doesn't "provide" social security. It normally provides unemployment checks but the employer pays unemployment insurance taxes.

I can't argue that we should pay taxes to fund government but what worries me is government is using taxes to pick winners and losers and usually rewarding losers.
 
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