“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.]
Also, selling the shares would not avoid $867 million in hiked taxes. The tax is going from 15% to 20%. So the maximum they could save would be 5% of 6.8 billion. And presumably far less than the entire amount is actually capital gains. So the entire article is pretty much pointless and wrong.
The article is bunk. Firstly, why would the sale result in “millions of Apple shares” hitting the market? The far greater majority of Jobs’ wealth was in Disney stock. It’s likely he held only around 1 million AAPL. $500m or so isn’t a small amount by any means, but Apple is a $350bn company!!
Also, since when was 867 1/20th of 6780? The tax increase figure by my calculation should read $339m. Even allowing for the 3.8% additional tax only brings the figure to $467.8m.
I’m glad this guy isn’t my IFA that’s for sure.
Correction on the maths. Allowing for the 3.8% additional brings the figure to $596.64m, not $467.8m as stated above.
Teach me to proof read eh?
I think Jobs family will be fine either way, lets be honest in day to day living there isn’t much difference between living on 6 billion instead of 6.8 billion.
My God. Pundits have spent years second-guessing Steve Jobs. Then he dies, so they start second-guessing his widow.
At this time, I really can’t comment on capital gains,
tax rates,dividends,etc. as I have no expertise in these
matters. However ask me in a few years when I’m a
multi millionaire. I’m going to follow Newt Gingrich’s
advise and take a bath and get a job. 🙂
Just a question cause I don’t know.
In Califonia when you get a divorce you assets are split 50\50 unless you have some other arrangement. So why would his wife get her half as inheritance is it not already hers?
I would guess the assets are in a trust that was jointly held by the two of them. With his death, she’s the remaining trustee. Without a trust, the probate expenses would have been 4-7%, and estate taxes would be 35% of the value of the estate above $5 million.
Good estate planning is essential, even for us working slobs, unless you feel duty-bound to leave a giant wad of your cash to the U.S. Treasury.
Vultures have been circling Steve’s death bed for some time. This is just a scare tactic. If they sell their stock how much do the “wealth advisors” make? If they don’t sell, how much will they make? Exactly.
A client of ours held Apple back when it was around $120. His broker “advised” the same thing. Quick, sell it so you don’t have to pay taxes! Then buy it back when it dips blah blah. It never dipped. Idiot. Ultimately, who cares about paying taxes? Just pay it, manage investments wisely for the long term and continue to profit.