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Are there people who receive millions of dollars in income via stock options who pay a lower rate? If so, how does that work?
by jstelly 9y ago
Are there people who receive millions of dollars in income via stock options who pay a lower rate? If so, how does that work?
- CocaKoala 9y agoHere's a Bloomberg article from 2012 that lists ten techniques: https://www.bloomberg.com/news/articles/2012-04-17/how-to-pay-no-taxes-10-strategies-used-by-the-rich https://www.bloomberg.com/news/articles/2012-04-17/how-to-pa...
- jstelly 9y agoIt's worth mentioning that none of these techniques actually apply to the case where you exercise stock options - other than the one that says basically "take options as compensation if you can because you don't pay taxes until you exercise them" which is true for everyone who gets options (because you don't get any liquidity) not just rich people with expensive accountants. The only techniques that apply to income taxes are the "borrow against stock technique" (has a big caveat about a rich person who lost in court when he used it) and the deferred compensation example (which is also zero liquidity; presumably you pay all of the income taxes when you actual get the money). The article makes a better case for ways to avoid death taxes or real estate taxes though.