HomeOthersElon Musk faces a tax bill of more than $15 billion!

Elon Musk faces a tax bill of more than $15 billion!

A CNBC Report says that Elon Musk faces a tax bill of more than $15 billion in the coming months on stock options.

Over the weekend, Musk asked his 62.7 million Twitter followers whether he should sell 10% of his Tesla holdings.

Read more: “Texas Should Not be California Copycat” – Elon Musk

“Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he tweeted.

The Tesla CEO said he would “abide by the results of this poll, whichever way it goes.” The results were 58% in favor of selling and 42% against, suggesting he will sell the shares.
 
However, Musk would have likely started selling millions of shares this quarter.

Musk was awarded options in 2012 as part of a compensation plan. Because he doesn’t take a salary or cash bonus, his wealth comes from stock awards and the gains in Tesla’s share price.

Read more: Elon Musk’s Wealth Surges $36 Billion in a Day as Tesla Touches $ 1 Trillion Mark

The 2012 award was for 22.8 million shares at a strike price of $6.24 per share. Tesla shares closed at $1,222.09 on Friday, meaning his gain on the shares totals just under $28 billion.

The company has also recently disclosed that Musk has taken out loans using his shares as collateral, and with the sales, Musk may want to repay some of those loan obligations.

Since the options are taxed as an employee benefit or compensation, they will be taxed at top ordinary-income levels, or 37% plus the 3.8% net investment tax. Musk will also have to pay the 13.3% top tax rate in California since the options were granted and mostly earned while he was a California tax resident.

Read more: Elon Musk to donate $250 billion for reparations to African Americans in U.S.”

According to Tesla, “If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means. Any such sales could cause the price of our common stock to decline further.”

Elon Musk is the richest person in the world, with a net worth of more than $185 billion, recently exceeding Amazon CEO Jeff Bezos, who is worth $184 billion.

Stay updated with more news here at the East County Gazette. 

Celine German Lagundi
Celine German Lagundihttps://theeastcountygazette.com/
Celine is an experienced news writer, artist, and advocate based in Cebu. She is passionate about pop culture and current affairs.
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