Steve Jobs’ heirs advised to sell Apple shares to avoid $867 million in hiked capital gains taxes

“When Steve Jobs died last month, he left $6.78 billion of stock in both Apple and Disney presumably to his wife and family,” Barbara E. Hernandez reports for NBC Bay Area.

“His widow, Laurene Powell Jobs, may not have a better time to sell off the billions of stock and avoid $867 million in capital gains taxes,” Hernandez reports. “Financial planners told Bloomberg that Powell Jobs and the family should quickly divest and diversify its holdings to avoid higher taxes.”

Hernandez reports, “Capital gains taxes are set to rise in 2013 from 15 to 20 percent, and Americans with a high income may also be subjected to a 3.8 percent tax on unearned gains… Before his death, Jobs moved the shares into a trust to avoid probate fees. However, his will hasn’t been made public, but it’s likely most of his estate is distributed between his surviving wife and four children. ‘I can’t see any reason not to sell all of it,’ Kacy Gott, chief planning officer at the wealth-management firm Aspiriant, told Bloomberg… That could mean millions of [AAPL] shares will be on the open market and possibly in the hands of private equity groups — likely not Steve Jobs’ or Apple’s ideal scenario.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Jungle” for the heads up.]

62 Comments

    1. No, they will not — not even need to.

      Contrary to Apple, Disney pays actual dividends. So Jobs heirs may arrange a long time load, secured/mortaged with Apple’s shares to pay up capital gain taxes in full, and return this loan gradually thanks to money from Disney’s shares.

      1. … taxes on stock you own! You pay taxes – maybe – on stock you SELL. And, of course, on dividends you collect.
        So, if the tax rate on the sale will increase by a third in a bit over a year, but the price of the stock will increase by half, you make more by holding it. Maybe Hernandez is one of those “analysts” who understand the numbers, but not the underlying values?

  1. Damn skippy! Dat be da people’s money! Feel me? Better be more cause that ain’t even a fraction of ONE DAY’s interest on the national debt. We gotta pay for Michelle’s vacations now, so dig deep in those deep pockets family Jobs!

    1. “We gotta pay for Michelle’s vacations now?” Seriously, are you oxygen-deprived? Is that the Big Picture that you see? Very, very bizarre comment. Then again, so is the implication in the headline.

      1. It’s in line with his other political posts. It’s odd as I kept a copy of a very lucid post he wrote some time ago about net neutrality. Very smartly written. Now the low stoop to prove he, like many others, can bash the current administration and hijack a discussion.
        Sad.

        1. Yeah, harass and vilify all who disagree with you leftist thugs. That’s the freedom we all dream of, being all dressed alike in our Mao frocks. Love communism so much, move to Cuba!

        2. I agree. Very sad. With all of these unregistered folks, you never know when someone is maliciously a well-known handle. But sometimes the BS is spouting from the same source that previously submitted cogent posts.

  2. CGT and other taxes may indeed be going up, but that doesn’t mean that the only option is to sell all of their shares.

    The beneficiaries of his will may decide that they are already pretty well off and can retain the shares for the time being and sell them in the future. My hunch is that they will rise in value to such an extent that the increased taxes won’t matter.

    1. Right you are. Seems to me that the ‘financial planners’ advice is just short of asinine.

      Why would you sell equities that are destined to double (at minimum) in the next 24 months to avoid a 5% tax consequence?

      Let’s see, $6.78 Billion in growth vs $867 Million in taxes, yep that seems really smart.

      I’ll bet he wants her to ‘diversify’ into 3% Treasuries because they’re government backed.

  3. Only people who don’t have lives, mind other people’s business.

    I’d bet Steve Job’ family who stood firmly behind him and all he stood for with unquestionable devotion would clearly understand and act in Apple’s best interest.

  4. Do they really think his wife cares about the taxes? People who can afford the stuff don’t look at the price tags. Only these dumb financial analysts who cannot afford anything are trying to “advice” people…

  5. Simply put: This is how the 1% keeps all their money while the rest of us HAVE TO pay our taxes to keep infrastructure going. I won’t hate on these guys —this is what a tax attorney will tell any client who owns a trust. I only shake my head when the rabid folks here think this is some “downfall of America.” Relax, guys. Rich people will always be rich —they have all the tools and power to stay that way. Worry about your own damn selves 🙂

          1. No. But the rich have people working for them to take care of that kind of stuff. They have the assets to efficiently employ market strategies to maximize return versus risk and to rapidly adapt to changing market conditions in seconds rather than hours or days.

            Glenn is correct. Money begets money. If I had $6.78B in stock, then I might consider selling some of it before the increase in capital gains to 20% (which I consider to be a reasonable number in the absence of a VAT or similar consumption-based approach). But they have a while to do this, and it would be foolish to dump shares and crash the stock price just to avoid paying an additional 5% of whatever fraction of AAPL they intend to sell.

    1. Question for everyone. How much money did you make last year as a salary? Steve Jobs worked his ass off and made a dollar. That was his “income”, and was tax according to the laws. Any money he “invested”, in other words took a risk with his money, he paid capital gains on. Just like Warren or you if you invested it. I pay the same amount in capital gains as Steve. You and everyone else can take their money and live off the capital gains if you can. This is different taxes that an income tax. different things.
      If you have the means to work for $1 dollar a year, I’m happy for you. But if you can’t and you have to work to make an “income” then the tax laws are different and you will pay more.
      Everyone has the ability to do the same. Take the money you have earned and save and invest it. Then when it grows, because you have taken that risk, and it’s to the point where you don’t need to work for an income, you too can be taxed at the same rate. Just remember, you already paid tax in it before when you originally made the money and you will only get taxed on the capital gains.
      Please someone explain why you that should be taxed like an income? It’s not the same and without investment money our system does not work. Go out and try to make your own company but whatever you do don’t borrow a dime. It’s not as easy as it sounds and understand the risk you and your family take.

      If they want to raise the capital gains tax to 20%, I don’t have a problem with that but don’t bitch unless you are actually taking the risk like these folks do.

  6. This is total BS. You can sell the shares one day next year and buy them back the next day. Then the gains are recorded for 2012 at the lower gains rate and you continue to own the shares.

  7. It’s about gaining control of Disney… I bet. At this point the largest single control of shares for Disney is headless. Maybe Laurene doesn’t care about the stocks or the money. The control of Disney, though is good for Apple, when Steve may have seen it that way. What needs to happen is Laurene needs to vet all of the recommendations made to her… Selling all those shares will be a payday for someone. Who stands to gain by this transaction?

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