The Wall Street Journal: Elon Musk’s potential sale of Tesla stock comes amid looming tax bill

Elon Musk’s pledge to promote 10% of his Tesla Inc. stock highlights the advanced financial internet the sector’s richest man has spun spherical his within most fortune.

Selling a stake valued at roughly $17 billion would possibly per chance supply Musk, who has at instances talked about he became once cash-awful, with a gargantuan liquidity infusion. It can per chance also bolt a good distance toward helping the billionaire pay a bill seemingly coming due from the Interior Earnings Carrier. Finishing these moves earlier than one year-discontinuance would come with the unprecedented thing about helping Musk steer definite of a imaginable tax enlarge subsequent one year.

Musk is rate roughly $300 billion on paper, consistent with the Bloomberg Billionaires Index, with the huge majority of that wealth tied up in Tesla and his rocket company, Home Exploration Applied sciences Corp. The Tesla
TSLA,
-1.94%

chief govt, who is compensated in stock awards and doesn’t settle for a cash salary from the electrical-vehicle maker, faces an August closing date to radically change roughly 22.9 million vested stock alternatives into shares or let them expire worthless, consistent with a regulatory submitting.

He would want about $143 million to insist these alternatives, and would possibly per chance owe greater than $9 billion in federal earnings and Medicare taxes upon exercising them. Under California legislation, Musk also seemingly would face a gargantuan insist tax burden due to exercised alternatives are handled as compensation partly earned within the insist while he lived there.

The tax hit that Musk faces seemingly would maintain come no topic the political debate unfolding in Washington. Musk himself signaled at a September convention that he anticipated to insist alternatives within the fourth quarter, triggering what he known as a gargantuan tax liability.

An expanded version of this document looks on WSJ.com.

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