Everyone who branded Facebook Co-Founder Eduardo Saverin as a tax-dodger for his decision to renounce his U.S. citizenship, which became public knowledge in the days leading up to the social network’s initial public offering, might want to take a step back.
Facebook stock was trading at just under $28 per share at the time of this post, and, according to Forbes Contributor Tim Worstall, the only way for Saverin to reduce his tax bill would be for him to wait until the stock tops $40 and then sell it.
Worstall pointed out that Saverin actually renounced his citizenship last fall, and he is required to calculate his tax bill as if he had just sold everything he owned at the time of his action, adding that Facebook stock was trading at a significantly higher value on secondary markets back then, and meaning that, as he put it, “Saverin locked in a tax bill at pretty much the peak of Facebook’s valuation.”
As it turns out, Saverin’s decision increased his tax bill, and did not lower it, barring an unforeseen spike in Facebook’s share price.
Readers: Are you as surprised to learn about this as we were?