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After a fierce operation, musk underpaid nearly $400 million in taxes

Share with friends and circles of friends with wechat scanning QR code < / P > < p > on November 25, Elon Musk, CEO of Tesla, has faced huge tax bills for exercising Tesla stock options. However, under his recent fierce operation, his tax bill has been reduced from the initial $3.1 billion to $2.7 billion < p > the fluctuation of Tesla stock has affected the U.S. government, musk himself and the electric vehicle manufacturer. When the stock price falls, this not only reduces Musk's tax owed to the U.S. government in the short term, but also reduces the total potential tax related to these shares when he sells them in the future. In the future, such sales may not be taxed by California because musk moved his residence to Texas last year < p > by launching polls on social media, exercising stock options, and selling newly subscribed shares during the decline of the company's share price, Musk's tax liability was reduced by nearly $400 million. Prior to this, musk asked fans whether it should sell 10% of Tesla shares. By exercising stock options, musk bypassed higher taxes < p > stock option reward is a kind of equity compensation. Employees can choose to buy shares at a predetermined share price far lower than their current trading price in the future. Musk bought the shares at $6.24 a share and sold them when the share price fell earlier this month, ensuring that he would pay a lower tax rate on the shares. However, musk will have to pay tax on the difference between the "strike price" and the actual value of the stock < p > Tesla's share price has risen sharply since September. The company reported strong quarterly results. Hertz, a car rental company, said it had ordered 100000 Tesla electric vehicles, making Musk's company more than $1 trillion in market value. On November 4, before musk exercised the option according to the plan, Tesla's share price hit a record closing high of $1229.91 per share < p > it is reported that musk sold about 2.6 million options as of last Friday, and he needs to pay an average federal tax of $421.59 per share. If musk sells his shares at the peak of Tesla's share price on November 4, he will have to pay about $481.51 per share. According to the tougher bill passed by the U.S. House of Representatives on November 19, there will be even more tax bills in 2022 < p > on November 6, musk asked fans whether they should sell 10% of the shares, and nearly 58% voted in favour. After its large-scale cash out, Tesla's share price fell by more than 15%. Since then, he has decided to sell millions of newly exercised stock options that will expire in November 2022 and become worthless < p > according to the current law, the future income higher than the exercise price will be taxed by 23.8%, while according to the Democratic Party's reconstruction plan, the future income will be taxed by 31.8%. Musk had previously pointed out that his tax bill would be higher when he sold long-term stocks. The analysis shows that the decline of stock price has a significant impact on Musk's tax payable < p > according to the Bloomberg billionaire index, musk is already the richest man in the world, with net assets of more than 300 billion US dollars. But he did not accept Tesla's cash salary and sometimes said he was short of cash. Before November this year, he rarely sold Tesla shares. Most of Musk's funds come from loans and use his shares as collateral. According to a financial declaration document in April 2020, he pledged about half of Tesla shares < p > as musk continues to exercise his option, if Tesla's share price falls, his tax bill will shrink, but the company's situation is even worse. In the case of lower share prices, Musk's salary received a smaller tax cut. For every $1 million reduction in Musk's option exercise income, he can save $370000 in federal income tax, while Tesla loses a deduction worth $210000 < p > Steve Rosenthal, a senior researcher at the center for tax policy in Washington, said that this situation may be carefully planned for the interests of Tesla and musk. He explained: "you can see that the two sides may have the motivation to lower the stock price together. Tesla can enjoy a 21% reduction, while Musk's reduction is up to 37%. For each dollar reduction, the two sides can save a total of $0.16." (small) < / P > < p >


2023-03-22 10:04:47

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