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Facebook's Zuckerberg faces $1 billion tax bill

Posted By -NO AUTHOR- On 03/28/2013 @ 11:36 pm In Money | No Comments

(CNN/Money) Facebook’s stock market debut left founder and CEO Mark Zuckerberg with a paper fortune currently valued at $13 billion — and a 2012 tax bill of around $1.1 billion.

Zuckerberg’s whopping tax hit stems from his move last May to increase his stake in Facebook. On the day of Facebook’s initial public offering, Zuckerberg exercised a stock option and purchased 60 million Facebook shares at a “strike price” of 6 cents each.

Even if those shares are never sold, the IRS treats them as ordinary income at the time the options are exercised. The rationale is that such options are a form of compensation, just like regular wages.

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