Facebook founder Mark Zuckerberg slapped with $1.1 billion tax bill
Huge windfall unlikely to upset Internet wunderkind
Facebook founder Mark Zuckerberg got hit with a $1.1 billion tax bill for 2012. This momentous debt owes to his company's decision to go public last year, which in doing so brought Zuckerberg's fortune to an estimated $13 billion. He can't hit the "like' button over this, but as others have pointed out - Zuckerberg will survive.
What. me worry? With a personal fortune exceeding $13 billion, few believe that Facebook's Mark Zuckerberg will be that upset with his $1 billion tax bill.
Coupled with a 48.3 percent total tax rate, that leaves Zuckerberg owing Uncle Sam more than $1 billion.
Few will shed tears over Zuckerberg's plight. Billionaires such as he usually don't grieve their giant tax bills, one expert says. "I have had very few clients that get these huge windfalls who have resented paying the tax. They know they got lucky," San Francisco-area accountant Stan Pollock says.
"Most people are thrilled, to tell you the truth," Stan Pollock, a San Francisco-area accountant who specializes in handling tax issues for tech workers, told CNN. "I have had very few clients that get these huge windfalls who have resented paying the tax. They know they got lucky."
A spokeswoman for Facebook declined to comment on the monstrous tax bill.
Zuckerberg bought 60 million Facebook shares the day of its initial public offering. Since then, he sold more than 30 million shares for about $1.13 billion. A regulatory filing submitted then said Zuckerberg would use most of that money to cover his taxes.
This debt is even before factoring in some deductions, such as for the $500 million charitable donation he made in December to the Silicon Valley Community Foundation, and any other income Zuckerberg collected last year. Only Uncle Sam and California's tax agency know exactly what's in Zuckerberg's return, but three California CPAs believe Zuckerberg's bill for the year will probably exceed $1 billion.
This is unusual, even for billionaires.
"With numbers that large, it's usually capital gains, not ordinary income," Toby Johnston says, a partner at tax firm Moss Adams LLP's Silicon Valley office who works with wealthy clients. Investors profiting off their gains paid a significantly lower tax rate last year than Facebook's founder will. The highest federal capital gains rate in 2012 was 15 percent. It goes up to 23.8 percent (including a Medicare surtax) this year.
© 2013, Distributed by NEWS CONSORTIUM.
Pope Francis Prayer Intentions for December 2013
General Intention: Victimized Children. That children who are victims of abandonment or violence may find the love and protection they need.
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