Law Offices of Connie Yi, PC
Tell Us About Your Case

For the safety of our community, clients and staff, we have suspended all in-person meeting effective March 17, 2020. All consultation meetings will be via Phone or Zoom Video Conferencing. Please contact us at (925) 484-0888 or email us directly at [email protected] to schedule the consultation.

View Our Practice Areas

Facebook executive saves on taxes, ditches the U.S.

If you've ever tried to get someone to do something they don't want to do, you may agree with the concept that people do things for their own reasons, and not for yours. We may never truly know the reasons that led a Facebook executive to renounce his U.S. citizenship and leave our sunny California skies. However, we do know the result of that decision.

By renouncing his citizenship, Facebook executive Eduardo Saverin saved himself approximately $67 million in capital gains tax. Did he leave California to save on taxes -- or for other reasons?

According to reliable sources, the $67 million figure is a calculation of the difference between the value of his stock when he renounced his citizenship ($2.44 billion) and the current value ($2.89 billion) multiplied by a 15 percent capital gains tax.

Does saving $67 million matter when you are worth nearly $3 billion? We can't answer that. Saverin claims that his move to a permanent residence in Singapore is so that he is better able to make future investments in Asian markets. He says that he intends to invest in Brazilian and other global companies that have strong Asian connections.

Something to consider is that the $2.89 billion that his stock is worth, is worth that only if he sells it. Right now, it is just paper. If he were still a California resident, he would need to pay the $67 million out-of-pocket. That might make a difference.

Facebook founder Mark Zuckerberg took a different path. According to financial analysts, he will write out checks for $189 million to the state of California and $714 million to the Internal Revenue Service.

Even if you're not a Facebook executive, it makes sense to meet with a qualified professional to engage in capital tax planning so that you can make choices based on your reasons -- whatever they may be.

Source: Los Angeles Times, "Uncle Sam, say goodbye to Eduardo Saverin and $67 million in taxes," Deborah Netburn, May 16, 2012

Source: Los Angeles Times, "California to reap windfall from Mark Zuckerberg in Facebook IPO," Jessica Guynn, May 3, 2012

No Comments

Leave a comment
Comment Information

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Email Us For A Response

Office Locations

Law Offices of Connie Yi, PC
323 Ray Street
Pleasanton, CA 94566

Phone: 925-484-0888
Pleasanton Law Office Map

19925 Stevens Creek Blvd
Suite 100
Cupertino, CA 95014

Toll Free: 888-312-6978
Map & Directions

San Francisco
490 Post Street, Suite 508
San Francisco, CA 94102

Toll Free: 888-312-6978
Phone: 415-433-3350
Map & Directions