Jeff Bezos sold $2 billion worth of stocks last week, and the notable advantage was that he avoided paying state taxes on the transaction.
Last year, Bezos announced on Instagram that he was leaving Seattle after nearly three decades to relocate to Miami.
He stated that the move was primarily motivated by a desire to be closer to his parents and his rocket launches at Blue Origin. However, the timing also hinted at another factor: taxes.
In 2022, Washington state introduced a new 7% capital gains tax on sales of stocks or bonds exceeding $250,000.
Given that Washington state lacks a personal income tax, this new levy represented Bezos’ inaugural encounter with state taxes on his stock transactions.
Beginning in 1998, Bezos disposed of billions of dollars worth of Amazon shares virtually every year for over twenty years to finance his charitable endeavors, his aerospace firm Blue Origin, as well as his recent acquisitions including a $500 million mega yacht and an expanding portfolio of properties acquired alongside his partner Lauren Sanchez.
In 2022, with the implementation of the tax, Bezos ceased his selling activities. There was no liquidation of Amazon stocks throughout 2022 and 2023, with only $200 million in shares gifted by the end of the previous year.
Following his relocation to Miami, Bezos is now compensating for the hiatus. As disclosed in a recent filing with the SEC, Bezos initiated a predetermined stock-selling scheme to divest 50 million shares before January 31, 2025.
Based on current market values, this would translate to an aggregate of over $8.7 billion.
Due to Florida’s lack of state income tax and absence of capital gains tax, Bezos managed to save $140 million from the recent $2 billion sale, which would have otherwise been payable to Washington state.
Over the next year, on the entire sale of 50 million shares, his savings are projected to exceed $610 million, assuming Amazon’s stock value remains constant.
However, if the shares continue to appreciate, the value of his holdings and subsequent tax savings will increase even further.
In simpler terms, Bezos has effectively covered the cost of his 417-foot yacht, Koru, solely through his tax savings in Florida.
Regarding his new residential acquisitions, Bezos acquired two mansions in Indian Creek for a total of $147 million and is reportedly eyeing three additional properties on the island, which is also home to notable figures like Tom Brady and Carl Icahn.
Local real estate experts speculate that Bezos will likely demolish the existing structures to construct a new estate, with the total expenses for the new property estimated to surpass $200 million.
