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(CNN)   Mark Zuckerberg fined $1.1 billion for creating Facebook   (money.cnn.com) divider line 72
    More: Interesting, CEO Mark Zuckerberg, Facebook, ordinary income, tax bills, Legislative Analyst's Office, stock options  
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6438 clicks; posted to Business » on 29 Mar 2013 at 10:20 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-29 10:04:04 AM
tell us what you really think about taxes subby
 
2013-03-29 10:04:14 AM
He'll get over it.
 
2013-03-29 10:18:02 AM
bleep bloop taxes legal theft
 
2013-03-29 10:19:57 AM
Wait so he has to help support the infranstructure and legal protection that aided his company's growth such as copyright law? THIS IS INSANE!!!
 
2013-03-29 10:26:58 AM
Subby says taxes are the same as fines?

thestrawfeminist.files.wordpress.com
 
2013-03-29 10:30:34 AM
"Most people are thrilled, to tell you the truth," said Stan Pollock, a San Francisco area accountant who specializes in handling tax issues for tech workers. "I have had very few clients that get these huge windfalls who have resented paying the tax. They know they got lucky."

And then there are Republicans.
 
2013-03-29 10:31:12 AM
He got off lightly.
 
2013-03-29 10:33:18 AM

namatad: tell us what you really think about taxes subby


Might need fresh batteries in the sarcasm detector.
 
kab
2013-03-29 10:35:51 AM

Rev.K: Subby says taxes are the same as fines?



Definitely not.   A clever accountant can't help you avoid paying a fine.
 
2013-03-29 10:35:52 AM

Mr.Tangent: namatad: tell us what you really think about taxes subby

Might need fresh batteries in the sarcasm detector.


I think you need a trollmeter for that.

//for detecting trollmitters.
///trollmittermeter?
 
2013-03-29 11:08:25 AM

Rev.K: Subby says taxes are the same as fines?


Just ask Chief Justice John Roberts.
 
2013-03-29 11:19:52 AM
I would gladly pay $1 billion to have $13 billion.
 
2013-03-29 11:28:39 AM

qorkfiend: I would gladly pay $1 billion to have $13 billion.


I'll go further! I'll gladly pay 12 billion to have one!
 
2013-03-29 11:52:59 AM

qorkfiend: I would gladly pay $1 billion to have $13 billion.


Deal. As soon as you pay up you can have them.
 
2013-03-29 12:03:26 PM
The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.
 
2013-03-29 12:09:52 PM

ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.


Actually the option has a specific exercise date and a strike price of 6 cents per share. That IS compensation. Their current share price is $25.58 - so he is being paid $25.52 x 60,000,000 by the business in the form of shares. This is a flexible payment based upon performance - kind of like a bonus which can fluctuate. Peons like you and me are just written a check when we receive a bonus, but for really rich guys the company will just issue shares directly instead of issuing shares to acquire cash which would then be paid out.
 
2013-03-29 12:14:19 PM

ScouserDuck: The issue is its his worth vs money he actually made. It's all in stock, he hasn't made the money yet. In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.


"Assets" are part of your net worth, champ. I've got less than $1,000 in the bank, but I can probably find $1,000 worth of stuff I own (excluding my car, which I still owe several thousand on).
 
2013-03-29 12:14:34 PM

madgonad: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.

Actually the option has a specific exercise date and a strike price of 6 cents per share. That IS compensation. Their current share price is $25.58 - so he is being paid $25.52 x 60,000,000 by the business in the form of shares. This is a flexible payment based upon performance - kind of like a bonus which can fluctuate. Peons like you and me are just written a check when we receive a bonus, but for really rich guys the company will just issue shares directly instead of issuing shares to acquire cash which would then be paid out.


So is the money in his accounts or does he still have the money in the forms of stock? If its still stock, he'll be taxed again when he does sell it, correct?
 
2013-03-29 12:21:41 PM

ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.


You don't seem to grasp what a stock option is or how exercising one works. You get to buy a share for less than the market value. You pay $10 dollars for a share that was worth $20 dollars when you bought it. That $10 difference is treated, as it should be, as income. Here's what you do not seem to understand, when he sells that share, he has to pay capital gains above his base price, which is $20. He did not have to exercise his options. If he didn't, no income, no taxes. Crying a river for a person that just made a multi billion dollar windfall, not from the rise in the value of the stock he owns, but by being allowed to by shares at a fraction of their true worth makes you look like an idiot.
 
2013-03-29 12:23:14 PM

ScouserDuck: So is the money in his accounts or does he still have the money in the forms of stock? If its still stock, he'll be taxed again when he does sell it, correct?


No, that is not correct.
 
2013-03-29 12:26:56 PM
I bet he protests this "legal" theft at gunpoint by going Galt and shutting down Facebook.

That's what usually happens when the ultra-wealthy are asked to contribute back to society in an amount commensurate with how much they've taken from it, right?
 
2013-03-29 12:30:19 PM

poot_rootbeer: I bet he protests this "legal" theft at gunpoint by going Galt and shutting down Facebook.

That's what usually happens when the ultra-wealthy are asked to contribute back to society in an amount commensurate with how much they've taken from it, right?


Thisi939.photobucket.com might just kill him:
 
2013-03-29 12:56:10 PM
$1.1 Billion on $13 billion realized?  Oh noes!

Icanhaz 7.6% tax rate?

What!?!  Not mine?

I has a sad at 22% effective federal tax rate.
 
2013-03-29 01:00:36 PM

kab: Rev.K: Subby says taxes are the same as fines?


Definitely not.   A clever accountant can't help you avoid paying a fine.


Well, he can if he points out to you that what you are trying to do is going to get you fined...  like claiming soverign citizenship.  Tax avoidance is not a crime.  Tax evasion is.  Many of the things people do to avoid taxes are rather stupid, but then, it is their money.  That they limited their ability to enjoy their liquid assets because of unreasonable concern of the tax concequences... is entirely their choice.
 
2013-03-29 01:07:16 PM
Glad he can help contribute considering he stole the idea of Facebook from a few different people!
 
2013-03-29 01:19:56 PM
Doesn't seem high enough, facebook has done far more damage than that.
 
2013-03-29 01:47:54 PM

MadHatter500: $1.1 Billion on $13 billion realized?  Oh noes!

Icanhaz 7.6% tax rate?

What!?!  Not mine?

I has a sad at 22% effective federal tax rate.


22%, damn. Single, good job, and nothing to itemize?
 
2013-03-29 01:52:40 PM

ScouserDuck: madgonad: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.

Actually the option has a specific exercise date and a strike price of 6 cents per share. That IS compensation. Their current share price is $25.58 - so he is being paid $25.52 x 60,000,000 by the business in the form of shares. This is a flexible payment based upon performance - kind of like a bonus which can fluctuate. Peons like you and me are just written a check when we receive a bonus, but for really rich guys the company will just issue shares directly instead of issuing shares to acquire cash which would then be paid out.

So is the money in his accounts or does he still have the money in the forms of stock? If its still stock, he'll be taxed again when he does sell it, correct?


Since you know so little about how stock options work, I'm guessing you're not in a position where you have to worry about them. Nothing wrong with that; I'm not, either. But getting your panties in a wad over something that doesn't affect you seems weird to me.
 
2013-03-29 01:58:21 PM

ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.


I have to pay taxes for stock options i get through my company..   I get two types, one where i pay taxes even if i didn't sell them and a different one where i don't pay taxes until after i sell them.   I guess because i'm not a job creator it's not an outrage.
 
2013-03-29 02:07:25 PM

Mitch Taylor's Bro: ScouserDuck: madgonad: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.

Actually the option has a specific exercise date and a strike price of 6 cents per share. That IS compensation. Their current share price is $25.58 - so he is being paid $25.52 x 60,000,000 by the business in the form of shares. This is a flexible payment based upon performance - kind of like a bonus which can fluctuate. Peons like you and me are just written a check when we receive a bonus, but for really rich guys the company will just issue shares directly instead of issuing shares to acquire cash which would then be paid out.

So is the money in his accounts or does he still have the money in the forms of stock? If its still stock, he'll be taxed again when he does sell it, correct?

Since you know so little about how stock options work, I'm guessing you're not in a position where you have to worry about them. Nothing wrong with that; I'm not, either. But getting your panties in a wad over something that doesn't affect you seems weird to me.


My panties aren't in a wad. In fact, in my post I didn't really see any emotion at all. But on Fark there is so much blatant hatred towards people with money that I don't know when criticisms are actually legit. In my mind, the guy was paid with paper...he is worth that money but doesn't necessarily HAVE that money.

Same way that estate taxes break up family run farms. The farms get passed down to the next generation but there isn't enough liquid assets to pay the estate tax so families have to break up what they built.

As I mentioned before. There was a farker who had a hard time paying child support because the courts counted that years stock option that he got as income. To me, that sucks.

And you're right. I don't work in a field that has stock options so I most likely have gaps in my understanding
 
2013-03-29 02:10:13 PM

Doublespeak: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.

I have to pay taxes for stock options i get through my company..   I get two types, one where i pay taxes even if i didn't sell them and a different one where i don't pay taxes until after i sell them.   I guess because i'm not a job creator it's not an outrage.


I'm sorry nobody has written a newspaper article about you. But I would take the same position with you as I would in this case. It just seems my position is wrong.
 
2013-03-29 02:14:19 PM

ScouserDuck: Doublespeak: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.

I have to pay taxes for stock options i get through my company..   I get two types, one where i pay taxes even if i didn't sell them and a different one where i don't pay taxes until after i sell them.   I guess because i'm not a job creator it's not an outrage.

I'm sorry nobody has written a newspaper article about you. But I would take the same position with you as I would in this case. It just seems my position is wrong.


Hah, thanks but i don't want an article.  It's silly, stock options are a bonus and basically free money on top of the salary I already made.  Why wouldn't I pay taxes on it?
 
2013-03-29 02:20:17 PM

Doublespeak: ScouserDuck: Doublespeak: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.

I have to pay taxes for stock options i get through my company..   I get two types, one where i pay taxes even if i didn't sell them and a different one where i don't pay taxes until after i sell them.   I guess because i'm not a job creator it's not an outrage.

I'm sorry nobody has written a newspaper article about you. But I would take the same position with you as I would in this case. It just seems my position is wrong.

Hah, thanks but i don't want an article.  It's silly, stock options are a bonus and basically free money on top of the salary I already made.  Why wouldn't I pay taxes on it?


With a paycheck..you have the money in your hands..you give a percentage of that to the govt. Stock Options aren't liquid. In this case Zuckerberg needs to have 1.1 bil in the bank to taxes on money he doesn't even necessarily have. I.e. if facebook were to suddenly fail...his bonus is essentially $0.. But he paid 1.1 bil in taxes on it. It just makes more sense to me to tax the whole thing (the original option and any gains) once sold. Then the money is actually there to tax.
 
2013-03-29 02:22:05 PM

ScouserDuck: Doublespeak: ScouserDuck: Doublespeak: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.

I have to pay taxes for stock options i get through my company..   I get two types, one where i pay taxes even if i didn't sell them and a different one where i don't pay taxes until after i sell them.   I guess because i'm not a job creator it's not an outrage.

I'm sorry nobody has written a newspaper article about you. But I would take the same position with you as I would in this case. It just seems my position is wrong.

Hah, thanks but i don't want an article.  It's silly, stock options are a bonus and basically free money on top of the salary I already made.  Why wouldn't I pay taxes on it?

With a paycheck..you have the money in your hands..you give a percentage of that to the govt. Stock Options aren't liquid. In this case Zuckerberg needs to have 1.1 bil in the bank to taxes on money he doesn't even necessarily have. I.e. if facebook were to suddenly fail...his bonus is essentially $0.. But he paid 1.1 bil in taxes on it. It just makes more sense to me to tax the whole thing (the original option and any gains) once sold. Then the money is actually there to tax.


Well basically when mine became active I could choose to sell to cover he taxes or pay them myself.  The choose to sell option takes care of your scenario above and this is what I did and he can do the same,
 
2013-03-29 02:31:59 PM

ScouserDuck: Doublespeak: ScouserDuck: Doublespeak: ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.

I have to pay taxes for stock options i get through my company..   I get two types, one where i pay taxes even if i didn't sell them and a different one where i don't pay taxes until after i sell them.   I guess because i'm not a job creator it's not an outrage.

I'm sorry nobody has written a newspaper article about you. But I would take the same position with you as I would in this case. It just seems my position is wrong.

Hah, thanks but i don't want an article.  It's silly, stock options are a bonus and basically free money on top of the salary I already made.  Why wouldn't I pay taxes on it?

With a paycheck..you have the money in your hands..you give a percentage of that to the govt. Stock Options aren't liquid. In this case Zuckerberg needs to have 1.1 bil in the bank to taxes on money he doesn't even necessarily have. I.e. if facebook were to suddenly fail...his bonus is essentially $0.. But he paid 1.1 bil in taxes on it. It just makes more sense to me to tax the whole thing (the original option and any gains) once sold. Then the money is actually there to tax.


These are the different options and it's quite flexible.

Withhold Shares - Indicates that your employer will
withhold enough shares to cover the taxes due. The
net remaining shares will be released to you.

ƒƒSame-Day Sale - Sell all vested shares being released
from the particular grant. You'll end up with cash
proceeds in your brokerage account, less any fees and taxes.

Sell-to-Cover - Keep some of your shares, but sell just
enough to cover any associated fees and taxes. You'll
end up with shares of stock in your stock plan account.

Cash Transfer - Keep your vested shares, and pay any
associated fees and taxes with your own cash funds.
You'll end up with shares of stock in your stock plan
account. You'll need to ensure that you have adequate
funds in your account to cover the cost of fees and
taxes.
 
2013-03-29 02:49:30 PM
I'm having a hard time telling the difference between having 12 and 13 billion dollars.
 
2013-03-29 02:57:05 PM
img689.imageshack.us
 
2013-03-29 03:16:03 PM

ScouserDuck: With a paycheck..you have the money in your hands..you give a percentage of that to the govt. Stock Options aren't liquid. In this case Zuckerberg needs to have 1.1 bil in the bank to taxes on money he doesn't even necessarily have. I.e. if facebook were to suddenly fail...his bonus is essentially $0.. But he paid 1.1 bil in taxes on it. It just makes more sense to me to tax the whole thing (the original option and any gains) once sold. Then the money is actually there to tax.


The day before he exercised the options, he didn't have the stock. He chose to exercise the options. He chose to allow the profits (income) from the exercise to remain in the form of Facebook stock. None of that matters as far as taxes go. He made the profit (income) and he has to pay taxes. If my employer gave me the choice of taking my pay in the form of stock, I could do that. But, I would still have to pay income tax on my earnings.
 
2013-03-29 03:39:48 PM

NightOwl2255: poot_rootbeer: I bet he protests this "legal" theft at gunpoint by going Galt and shutting down Facebook.

That's what usually happens when the ultra-wealthy are asked to contribute back to society in an amount commensurate with how much they've taken from it, right?

This[i939.photobucket.com image 600x526] might just kill him:


You do know that the US existed before 1913 right?
 
2013-03-29 04:52:32 PM
Why are you guys calling his life's work a "windfall?" I mean, I hate the guy too, but he DID work for the money and, I dunno if you've ever been through an IPO but it's not a walk in the park. It's not like someone just walked up and handed him a check or he found a billion dollars in his pocket.
 
2013-03-29 04:55:01 PM

roddack: You do know that the US existed before 1913 right?


No, I didn't know that! Off to Wikipedia!
 
2013-03-29 05:00:41 PM

ScouserDuck: So is the money in his accounts or does he still have the money in the forms of stock? If its still stock, he'll be taxed again when he does sell it, correct?


Only the capital gain between the time he received it and when he sells the share. He pays the tax on the value awarded as income, but when he sells them he will pay capital gains on an increase and be able to deduct a loss if the shares are sold at a lower value.
 
2013-03-29 05:13:06 PM
I would love to have a one billion dollar tax bill.
 
2013-03-29 05:31:41 PM
And worst part is that he escaped jail time for his crimes as well...
 
2013-03-29 05:45:48 PM

ScouserDuck: The issue is its his worth vs money he actually made.  It's all in stock, he hasn't made the money yet.  In a thread yesterday about child support, a farker was talking about how his child support payments took into account stock options he had taken and not real income which means he had to pay based on money he didnt actually have.

But sure, continue to hate people because they're rich like the thread yesterday wishing a guy would die just because he was super wealthy and acting like a total fark wad.


This is what econmically-ill-read, "Job Creator"-knobslobberers actually believe.
 
2013-03-29 06:03:37 PM

ScouserDuck: My panties aren't in a wad. In fact, in my post I didn't really see any emotion at all. But on Fark there is so much blatant hatred towards people with money that I don't know when criticisms are actually legit. In my mind, the guy was paid with paper...he is worth that money but doesn't necessarily HAVE that money.

Same way that estate taxes break up family run farms. The farms get passed down to the next generation but there isn't enough liquid assets to pay the estate tax so families have to break up what they built.

As I mentioned before. There was a farker who had a hard time paying child support because the courts counted that years stock option that he got as income. To me, that sucks.

And you're right. I don't work in a field that has stock options so I most likely have gaps in my understanding


My mistake for misinterpreting your intent via text. We cool? :-)

Now, as for stock options, alternative minimum taxes and a lot of other complex financial instruments in this country...it's complicated. And the correct way to answer complicated problems is to figure it out or hire an expert. In the case of the divorced farker, maybe there's a lawyer with expertise in deferring payments on deferred income. In the case of the farmer's family, a good probate lawyer is essential AS SOON AS any changes to the original stakeholder's family situation occur. Get married? Get a living trust. Have kids? Update the living trust. Land value goes up or down? Update the living trust.

But in Zuckerberg's case? Those options weren't a surprise. He's known they were coming for quite a while and if he doesn't have a financial planner helping him deal with them, I wouldn't hesitate to point and laugh at whatever hilarity ensued. (hint: the only hilarity would ensue would be a slight reduction in his massive paper fortune.)

Personally, I don't hate Zuckerberg at all. He has had to learn how to manage a huge company by the seat of his pants, and so far, he hasn't made any drastic changes that could lead Facebook into Friendster and MySpace irrelevance. I don't think he's some business guru, either, but I give him props for coming out of nowhere to lead a very big company.
 
2013-03-29 06:04:57 PM

hugram: I would love to have a one billion dollar tax bill.


You, me and everyone else who understands how taxes work :-)
 
2013-03-29 06:18:40 PM

jankyboy: MadHatter500: $1.1 Billion on $13 billion realized?  Oh noes!

Icanhaz 7.6% tax rate?

What!?!  Not mine?

I has a sad at 22% effective federal tax rate.

22%, damn. Single, good job, and nothing to itemize?


Married, house in high property tax state with mortgage, extremely good job, no kids.  Yes, that good.  Before I got married I was up around 26% effective.  Unfortunately most of my income is W2 wages, not carried interest nonsense, and only a little in  "deferred" compensation.  And since I don't run my own business, damn few expenses can be tagged as deductible.  Effective rate has been coming down a little for me as my non-tax deferred investment income has ramped up - qualified dividends are nice.  Tax deferred investments have appreciated nicely, but that doesn't count as income until you tap it.

BTW - I am not complaining, only mocking.  I, and everyone who earns more than me, through wages, capital gains, dividends, etc... should be paying that kind of a effective tax rate.  Seriously, we can afford it.  If I was complaining, the world's smallest violin would still be too large.
 
2013-03-29 06:51:37 PM
I'll complain when I have similar problems.
 
2013-03-29 08:25:22 PM
The real problem is not how much the tax, but what they do with it. They pay parasites to have 1,000 kids, all of whom will be career felons, or else fund 999 weeks of unemployment.

Pay losers to be losers, that strategy is brilliant.

I'd be fine with a 95% tax rate if they did something worthwhile with the money. But as it is, they do something WORSE than burning it on a bonfire.
 
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