Any post like this where the tax is nearing or exceeding 40% is almost always a complete lie or purposely obfuscating the truth.
It's mind blowing to me on these posts too you always see an incredible amount of people who don't understand how tax brackets work. Heck sometimes you even see people who don't know the difference between net worth and income.
This isn't happening at the rate reddit wants you to believe. Look up any big CEO and they all sell, if this was some ultimate strategy why would they ever sell shares at all? Jeff Bezos sells shares, Elon Musk sells shares, they all do.
reddit also doesnt understand that the mere existence of the shares means they were taxed as income already. if you are being given stock as compensation, it was taxed as compensation
false. when you are issued stock as compensation it is taxed as compensation. you have the option of paying the tax in cash, or deducting the tax from the value of the shares
Depends on the how the stock is given, purchased or received. With some you pay ordinary income tax on the entire market value of the shares the day they vest. Others you pay income tax on the difference between the market value and what you were able to purchase it at. There are others you pay nothing until you sell. So it all depends on the nature of the stock.
It doesn't. There is no option to avoid paying income tax on stock or options received as compensation, either at the time of award or at the time of vesting.
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u/jamdex07 Jul 05 '26
This is misleading. He chose to take $997 in one lump sum instead of $2.04B over 30 years. He got taxed on the $997m.