Facebook CEO to face $1 BILLION tax bill! READ ALL ABOUT IT
Facebook’s Zuckerberg could face $1 billion tax hit, report says
March 31, 2013, 9:12 PM
Mark Zuckerberg, chief executive officer and founder of Facebook Inc.
Facebook FB 0.08% CEO Mark Zuckerberg may reportedly pay a tax bill of more than $1billion.
Zuckerberg faces the liability because he exercised options for 60 million Facebook shares at a strike prices of 6 cents a share on the day of the Internet firm’s IPO last year, CNN Money reported.
Even if the shares aren’t sold, they’re treated as ordinary income under IRS rules. That gave Zuckerberg income from the options alone of $2.3 billion last year, according to the report. Figure a federal tax of 35% and California rate of 13.3%, and 48.3% of the gain would go for taxes.
Zuckerberg does have some deductions, however, most notably a $500 million donation to the Silicon Valley Community Foundation.
Facebook co-founder Eduardo Saverin gave up his U.S. citizenship last year to move to Singapore ahead of the IPO, in a move viewed by many as an effort to avoid heavy taxes.