Facebook's stock market debut left founder and CEO Mark Zuckerberg with a paper fortune currently valued at $13 billion -- and a 2012 tax bill of around $1.1 billion.
Zuckerberg's whopping tax hit stems from his move last May to increase his stake in Facebook. On the day of Facebook's initial public offering, Zuckerberg exercised a stock option and purchased 60 million Facebook shares at a "strike price" of 6 cents each.
Even if those shares are never sold, the IRS treats them as ordinary income at the time the options are exercised. The rationale is that such options are a form of compensation, just like regular wages.
For Zuckerberg, that means reporting income last year of nearly $2.3 billion from his stock options alone. Add together the top 2012 federal tax rate of 35% and the top California rate of 13.3% -- the highest in the nation -- and you get a total tax rate of 48.3%.
A Facebook spokeswoman declined to comment on Zuckerberg's taxes.
To cover the giant bill he knew was coming, Zuckerberg dipped into his trove of Facebook stock. He sold 30.2 million shares during Facebook's IPO, taking in $1.135 billion. At the time, Facebook said in a regulatory filing that Zuckerberg planned to use the "substantial majority" of those proceeds to cover the taxes on his stock-option purchase.
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