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  1. #1
    Atomic Punk
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    Default Will Mark Zuckerberg Ever Pay Taxes Again?

    Next year Mark Zuckerberg’s base salary will receive a dramatic pay cut—going from a base salary of $600,000 to just one dollar.

    Which raises the question: will he ever pay taxes again?

    Zuckerberg’s salary cut is being compared to similar moves by other tech titans. Google’s Eric Schmidt and Larry Page are paid just $1 annual salaries. Steve Jobs took just $1 in salary from 1997 until his death last year. Other members of the one-percent/one-dollar club include Oracle’s Larry Ellison and Hewlett-Packard’s Meg Whitman.

    Zuckerberg was paid a base salary of $500,000 in 2011 and is set to be paid a base of $600,000 this year. He got a cash bonus of $250,000 for the first half of 2011 and will likely receive a similar bonus for the second half.

    Interestingly, he was alone among the top executives at Facebook who got no stock awards for 2011. The board—which is controlled by Zuckerberg himself—decided that he had enough stock to align his interests with the other shareholders. With 28.2 percent of the company, you would hope so.

    Zuckerberg’s pay cut could reduce his income tax burden to nothing.

    It’s possible that he might even be eligible for certain types of government aid for those with low-income—although it’s unlikely that he would collect them.

    In order to reduce his tax burden to zero, Zuckerberg would have to forego any future cash bonuses or additional stock awards. He would also have to stop employing certain Facebook services for personal use. Last year, for example, he had imputed income from the use of aircraft for personal use of about $692,679. He also received $90,850 in estate and financial planning from Facebook.

    Can Zuckerberg really live without income?

    He almost certainly can. There’s no evidence that he has an exceptionally expensive lifestyle. His biggest annual expense is probably all that flying around. The income he has already received and been paid will go a long way.

    Of course, his past income will not really be enough to see him through all of his expenses for his entire life. For those he will need a line of credit, preferably one with a tax advantage, and income that can be earned tax free.

    People sometimes talk about the rich “living off the interest” of their wealth. But that’s not really a tax efficient way to live if you are really, really wealthy. It’s better to live off of debt and muni bonds.

    The best thing for Zuckerberg would be a home equity line of credit—perhaps multiple home equity lines. He would borrow against the value of real estate he owns. The money he receives from the HELOC is debt rather than income, which means it isn’t taxed. Even better, the interest he pays on the HELOC can be used to offset other income he may earn.

    Zuckerberg will also be able to access credit secured by his Facebook holdings—which will amount to billions of dollars. These lines of credit will not be tax advantaged—no deduction for interest payments—but they will supply him with spending money that will not be taxed.

    When you have the net worth of Zuckerberg, you can live for a very, very long time on tax-free debt that you can use as income. Let’s say that Zuckerberg needs $2 million of spending power per year and lives another 60 years. That’s $120 million of spending. If he gets an interest rate of 4 percent and just rolls it over as new debt, he’ll eventually accumulate around $520,919,997. Some of that interest, of course, may be deductible against other income.

    The might seem like a lot of debt. But for Zuckerberg—who will likely be worth around $25 billion when Facebook goes public—it’s a drop in the bucket. What’s more, if Facebook continues to grow, Zuckerberg’s worth will grow along with his debt. His debt burden will be negligible compared to his net worth. The unimaginably rich really are different from the rest of us.

    Zuckerberg could also use the money he has earned, some from his HELOC and some from other loans to purchase income-producing, tax-exempt municipal bonds. The interest on the HELOC would be tax deductible—producing a double-tax advantage. The interest on the other loans would not be—but the income from coupon payments from the muni debt would be. He could even use the income from the munis to pay some of his interest expense, which would substantially reduce the lifetime accumulation of debt.

    The best way for Zuckerberg to meet large expenses—like, for instance, if he wants to buy an island in the Caribbean—would be to cash out some of his Facebook shares. He would only pay the 15 percent capital gains taxes on these.

    Perhaps most bizarrely, Zuckerberg might be eligible for an Earned Income Tax Credit if he keeps his personal income under $13,000. To be honest, that might be hard to do since a guy like Zuckerberg can produce that income by taking a company car home at night. And, in any case, it’s unlikely that Zuckerberg would find it worth the time to even file for an EITC that maxes out at just a few hundred dollars.

    To be clear, I have no idea what kind of plans Zuckerberg has for his future income and taxes. He may not want to accumulate debt for his entire life. Perhaps he has plans to become a big spender and will need to derive income beyond what he can get from muni bonds. But it’s very likely that at least some of the $90,850 worth of financial advice Zuckerberg received went to minimizing tax exposure.
    "Watch what people are cynical about, and one can often discover what they lack.” -- Gen. George S. Patton

  2. #2
    Eruption
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    His ex-buddy Saverin is giving up his US citizenship and moving to Singapore to not pay taxes.
    Your favorite band sucks.

  3. #3
    Banned! CaptainVonDoom's Avatar
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    Quote Originally Posted by xaminer View Post
    His ex-buddy Saverin is giving up his US citizenship and moving to Singapore to not pay taxes.

    Not entirely correct.

    he will still have to pay an "exit" tax. He won't pay capital gains tax though since Singapore doesn’t have a capital gains tax.

    At 15% long-term capital gains tax rate on $3.84B (Saverin's 4% stake),

    He will save $576 Million by giving up his citizenship and moving to Singapore.

  4. #4
    Atomic Punk
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    Senators target Facebook co-founder for giving up citizenship, seek to impose taxes

    Two top senators went after Facebook co-founder Eduardo Saverin Thursday over his decision to renounce U.S. citizenship, unveiling a proposal they claim would bar him -- or anyone -- from de-friending the United States in order to avoid taxes.

    Sen. Chuck Schumer, D-N.Y., who unveiled the proposal alongside Sen. Bob Casey, D-Pa., said their so-called "Ex-Patriot Act" would subject high-earning ex-Americans to a steep capital gains tax.

    The bill was their answer to the move by Saverin last year to renounce his citizenship and move to Singapore. The decision, made public in a recently released IRS list, came ahead of Facebook's initial public offering, and fueled speculation that Saverin cut ties with America in order to cut down his tax bill. Singapore does not impose capital gains taxes.

    "Saverin has turned his back on the country that welcomed and kept him safe, educated him and helped him become a billionaire," Schumer said. "This is a great American success story gone horribly wrong."

    The bill, though, could have repercussions far beyond Saverin's portfolio. According to a 2011 report by the Taxpayer Advocate Service, about 4,000 people renounced their citizenship between fiscal 2005 and 2010, with the pace of renunciations increasingly rapidly in recent years.

    The Schumer/Casey proposal would put the burden on anyone who renounces their citizenship to prove they didn't do it for tax avoidance purposes. If they can't prove that, Schumer said, the proposal would impose a 30 percent capital gains tax on future investment earnings -- for those who have a $2 million net worth or have had an average income tax liability of at least $148,000 in recent years.

    In addition, the bill would bar them from ever returning to the United States.

    A spokesman for Saverin, though, told Fox Business Network the decision "had nothing to do with taxes."

    "Eduardo was born and raised in Brazil and moved to the U.S. in 1992, becoming a U.S. citizen in 1998. He still has very strong ties to Brazil and is extremely passionate about not only his homeland, but also the U.S.," the spokesman said. "Eduardo recently found it to be more practical to become a resident of Singapore since he plans to live there for an indefinite period of time. He has invested in Asian, U.S. and European companies. He also plans to invest in Brazilian and global companies that have strong interests in entering the Asian markets.

    Accordingly, it made the most sense for him to use Singapore as a home base."

    The spokesman called the senators' proposal a reaction to "perception, not reality."

    Saverin would still be subject to a one-time "exit tax" for his decision, though the IRS would not confirm whether he has, in fact, paid that money.

    Schumer cast doubt on Saverin's claims.

    "Mr. Saverin says he's a global citizen, but it just so happens that the country where he has chosen to reside has no capital gain tax," he said. "This tax avoidance scheme is outrageous."

    http://www.foxnews.com/politics/2012...p-citizenship/
    "Watch what people are cynical about, and one can often discover what they lack.” -- Gen. George S. Patton

  5. #5
    Atomic Punk
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    Facebook IPO: More whimper than bang

    After all that hype, Facebook (FB) shares were up only modestly in the first few hours of trading. The biggest ever initial public offering by an Internet company was delayed for half an hour due to a glitch at the Nasdaq exchange, while eager crowds of gawkers outside the exchange's Times Square storefront waited for the open.

    With Facebook co-founder and CEO Mark Zuckerberg ceremoniously -- and virtually -- "ringing" the bill on the Nasdaq Stock Market from the company's Menlo Park, Calif., headquarters, Facebook's stock opened around $43 and quickly slipped to under $39, after pricing on Thursday at $38 a share.

    The offering, which raised $16 billion for Facebook, caps a meteoric ascent for the company, which Zuckerberg famously launched from his Harvard University dorm only eight years ago. Since then, and despite its fair share of hiccups and persistent questions about the company's long-term growth prospects, Facebook has grown into a global communications platform with more than 900 million users, or roughly 1 in 8 people on Earth.

    Perhaps more important as the company evolves, Facebook must now face the glare of operating as one of the highest-profile public companies in the world. A key question is how Facebook's management, and particularly Zuckerberg, will cope with the grind of satisfying investors quarter after quarter, along with the pressures of conforming with securities law.

    As even Zuckerberg concedes, Facebook is hardly the finished article as a business. Doubts remain about the sustainability of its business model, which for now remains almost entirely dependent on revenue from online advertising. Sales have slowed in recent years, and as users migrate to mobile platforms, it's less clear how Facebook will convert "likes" to cash.

    Beyond instantly turning a number of Facebook employees into millionaires and billionaires, the IPO was expected to boost investor demand for startup companies going public. The hope in Silicon Valley and other tech meccas around the country is that the offering will stimulate interest in smaller technology companies looking to enter the public markets. But if Facebook has a poor showing, those hopes may go unfulfilled.

    For now, the history of IPO performance hasn't dampened the excitement of retail investors, who are treating Facebook's launch today more as a touchstone cultural event than a stock offering. But as illustrated by Yahoo's woes as well as the demise of Netscape, which was bought by AOL in 1998, the corporate graveyard is full of companies that shined for a while before succumbing to mismanagement, technology shifts, and changing sensibilities.
    "Watch what people are cynical about, and one can often discover what they lack.” -- Gen. George S. Patton

  6. #6
    ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ Number 47's Avatar
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    Mark Zuckerberg and Wife Pledge 99% of Their Facebook Shares to Charity



    SAN FRANCISCO — Mark Zuckerberg, the co-founder and chief executive of Facebook, announced on Tuesday that he and his wife would give 99 percent of their Facebook shares “during our lives” — holdings currently worth $45 billion — to charitable purposes.

    The pledge was made in an open letter to their newborn daughter, Max, who was born a week ago.

    Mr. Zuckerberg and his wife, Dr. Priscilla Chan, said they were forming a new organization, the Chan Zuckerberg Initiative, to manage the money. “Our initial areas of focus will be personalized learning, curing disease, connecting people and building strong communities,” they wrote.

    In a securities filing, Facebook said Mr. Zuckerberg planned “to sell or gift no more than $1 billion of Facebook stock each year for the next three years.” He intends to retain his majority voting position in the company’s stock for the foreseeable future.

    Earlier this week, Mr. Zuckerberg was one of the billionaires who signed on to the Breakthrough Energy Coalition, a group organized by the Microsoft co-founder Bill Gates to contribute toward a multibillion-dollar clean energy fund. The announcement coincided with a Paris summit meeting intended to forge a global accord to cut planet-warming emissions.

    Mr. Zuckerberg and Dr. Chan have recently made visible investments and gifts in several kindergarten-through-high-school education projects.

    In May, AltSchool, a private school start-up in San Francisco that develops personalized learning technologies, announced that it had raised $100 million from a group of investors, including a donor-advised fund financed by the Zuckerbergs at the Silicon Valley Community Association.

    In September, Facebook announced that it was working with Summit Public Schools, a charter school network, to develop an on online platform to help tailor education to the needs and interests of individual students.

    And in November, EducationSuperhighway, a nonprofit group that helps K-12 schools tap federal funds for high-speed classroom Internet connections, announced that the couple had agreed to donate $20 million to its work.

  7. #7
    Atomic Punk Dave's Dreidel's Avatar
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    The worst fucking thing he could do with it.

    How about use your $50 billion in capital and start a company that actually trains, educates, and pays people a real wage while producing a real service or product. Just a fucking thought.

    Sorry, little pissed off at the world today, I am starting to think that everyone is just plain stupid.
    Taylor Swift is nice to look at. Adele can sing.

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  9. #8
    Atomic Punk bklynboy68's Avatar
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    Fuck Zuckerberg.
     "He has a swaggering retro machismo that will give hives to the Steinem cabal" -Camille Paglia on Donald Trump

    "Make way for the bad guy"- Tony Montana

    'This hamburger don't need no helper"- David Lee Roth

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    "My beef is people thinking Bon Jovi is good cuz they sold lots of records to housewives." -tango

    "But being number one doesn’t really mean jack fuck all. We sold twice as many records as other records that year (1984) that landed in the Number One position." ~Eddie Van Halen

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  11. #9
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    Quote Originally Posted by Dave's Dreidel View Post

    Sorry, little pissed off at the world today, I am starting to think that everyone is just plain stupid.
    welcome to my world. And yes. Zuckerberg is a world class idiot. I'm still trying to figure out the point of Facebook stock. Just greed.


    Sent from my iPhone using swagger

 

 

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