Why does Musk have to sell anything to pay for his taxes?
$Tesla(TSLA.US$ Don't billionaires like him borrow against the value of their shares? If he believes in the value of his shares to appreciate then obviously it's cheaper to get a loan at 1% interest than to sell his shares.
There's no way banks aren't willing to lend money to the world's richest man at a minimal interest rate.
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Dabria : The whole “billionaires get loans instead of selling stock” has been WAY overplayed. You might take a loan instead of selling stock to pay for a $500,000 car or a $10M home, but you dont do it to pay a Billion dollar tax bill.
Rivkal : My understanding is that he has a lot of incentive stock options (ISOs). You don't get taxes when you receive ISOs but they expire after a period of time and exercising them is a taxable event that can trigger the Alternative Minimum Tax (AMT).
For example Musk might have some stock options which cost him $10 to exercise and expire in November, the stock price is at $1013 and the difference between the two is what's taxable as income at the time the options are exercised under the AMT. So if he has 100k shares that expire at the end of the month he can either let them expire or exercise them. If they expire he gets nothing and there is no taxable event. If he exercises he has to calculate the bargain element, which would be the price of the stock at the time it is exercised minus the strike price. At the time of exercise he will need to check if he has to pay the AMT, which he probably will have to. So $1003 *100k is what he would be paying taxes on.
NotRoss : Musk has never received a penny of salary or bonus from Tesla, and now there is no luxury house, no yacht, no luxury goods, life is like an ordinary engineer
stonks 30000 Rivkal: to add, options received this way is considered as income and will be taxed in full, totaling 53%