“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.]
Give ’em to me!
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.
… 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?
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!
“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.
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.
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!
Frocks, huh?
“leftist thugs”? Sounds like the indignation of a holier than thou turd.
Do you have any idea how stupid you look when you make such utterly inane remarks? 😀
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.
Congratulations! Because of your ignorant comments I have decided to avoid the comments area from now on… At least the stories are less ignorant
Well, Bye
Please don’t breed.
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.
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.
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.
Finally, somebody speaking some sense.
Dam 1 percenters stealing my free health care!
Every post turns into political fodder. Get a life this is a tech blog.
It’s a form of Tourette’s,
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…
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 🙂
Simpy put: You are a shallow simpleton
Simply put: Glenn’s comment is right on.
Oh? Timely divesting to avoid capital gains tax is a privilege that is only aforded to the rich?…
I thought you had a brain.
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.
No, not only afforded to the rich. Those who sleep under bridges are free to avoid capital gains tax as well
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.
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.
Exactly!
Cashing in to save 5% in taxes is not equivalent to divesting yourself of a business. They can get the tax break and ultimately keep the shares.
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?
I’m pretty sure that a billionaire like had Steve had better financial advisors than a couple of magazine pundits.
And both Gates and Buffett know what’s fair and reasonable.
And neither Gates nor Buffett will pay tax on most of their capital gains as the shares go straight into their “charitable foundation”. (So much for Buffett’s claim that “my taxes are too low”.) If the bulk of the Jobs estate is ultimately intended for philanthropy, that’s the route to take.
By the way, for all those folks who think this is an evil loophole that allows 1%’ers to keep their money, consider this:
It’s a choice between paying the federal government 15% now or 20% in the future — possibly very far in the future. The federal government can use the money now so it’s a win-win situation. Furthermore, pretty much everyone who has income subject to capital gains tax is going to be cashing in before 2013. The figures are huge.
The taxpayer saves 5% in the long run; the federal government gets a *lot* of money now.
Why sell them? That is just stupid. Keep them.
Of course financial “advisors” are some of the people who have turned our country to crap so…….
STFU. Please do not give any advise to Laurene Powell Jobs. She knows these things better than any “financial planner” or “analyst”.
And this is why money managers are scary.. you want to worry about a transfer of wealth out of your pocket? listen to most of those people.
My informed advice for Ms. Powell-Jobs: no money to Bill Clinton.
Job had more Disney share then Apple.
He is the most single share owner
when you have $6.78 BILLION I do not think a tax liability of 800 million is something that will keep them up at night.
First of all there are a lot more money to be made with hese stock Apple will probably double in the next ten year
I’m guessing Ms. Powell-Jobs has a couple of good financial advisors… Cook and Oppy, perhaps?
Just a thought 😛
Steve’s wifey should consult with Little Timmy Geitner.
Keep em.
The shares will likely continue to go up more than the 5% differential in cap gains rate. Also, she may choose to donate the shares to an educational charity at some point, so there’s no reason to incur cap gains today.
If you sell them and buy them right back, you get the 5% tax savings and the future increased value of the stock. I can’t understand why some people here think it makes sense to take on a 5% liability on $6.78 Billion. That’s $339 Million. Obama would just give that money away to another big campaign donor with a “green” company that’s about to go bankrupt.
This simply shows that
1. There should be no distinction made between capital gains and other income (beyond just a few exceptions like the sale your primary residence.)
2. The tax code is beyond convoluted.
DING DING DING DING!!!!!! THE WINNER!!!!!
I disagree.
One is a risk of investment, the other is not. Without investment money, very few companies would be around today. Those dollars invested go towards creating jobs for people and then those businesses and employees pay additional tax on profit and income.
Witout it would be like any third world country if we didn’t have investment money.
More two-faced hypocrasy from this moron. He cuddles up to the Kenyan Community Organizer Fool with contributions, then offers to help him get reelected, but doesn’t give a dime to charity, avoids his hero’s Billionaires Tax by trying to hide from it. You know its on and on and on.
Tax dodger, options backdated, child abandoner, bald-face liar to Woz when he wasn’t stealing from him, mean spirited with employees. Stunk like a pathetic skunk for not taking a shower.
Good riddance.
Shouldn’t you be out on a ledge?
Are you sure they will starve if they don’t sell?
Jobs’ shares of AAPL amount to well less than even 1% of the company, so those shares “falling into the hands” of private equity companies are nothing more than they could simply buy at any time on the open market.