The Facebook IPO news is rolling strong this year as one of the biggest IPOs since Google went public years ago. It’s not surprising really, with 800 million people using the social site and the billions of dollars the IPO will generate for early investors and employees. Just think of all the new millionaires and billionaires that will be added to Forbes richest people list once the company is public. Which is the real reason behind the Facebook IPO this year and a great lesson in tax planning.
The current estimates value Facebook at $75 to 100 billion with an estimated $3 billion in revenues. The IPO will raise $5 billion for the company. It doesn’t need the extra funds with a current cash hoard of over $3 billion still sitting in its coffers and has no plans for the money either. Which leaves the real reason for going public, to allow early investors and employees to take advantage of tax savings from the $70 to 95 billion in personal wealth generated at the IPO.
All those newly created millionaires and billionaires will want to cash out a couple of those shares to buy big houses, expensive cars, yachts, all the things new-found wealth can buy. The kicker, by going public in early 2012, the shareholders will save on capital gains tax. Which means more money for them. It’s good to see greed and smart tax planning alive and well in Silicon Valley. Continue Reading…
Doing your taxes every year is hard enough with the difficulties of the tax code. It certainly doesn’t fit the category of exciting weekend plans. Which explains why most people put off the inevitable till the last-minute. A great idea if you still owe taxes. But if a refund is heading your way, this weekend is a great time to knock out your taxes and get that money in your hands quicker.
The U.S. Treasury is a charity case. At least super rich Warren Buffett believes it is, when he announced in