Jeff Bezos Sold 8 5 Billion Worth Of Amazon In The Last Nine Days He Also Saved A Fortune In Taxes Thanks To A Very Recent Change

Why did Jeff stop selling his shares in 2022?

Eight American states do not charge their residents a state income tax. Those seven states are: A ninth state, New Hampshire, does not tax earned income but does tax interest and dividend income. From some quick research, I THINK New Hampshire is phasing out those taxes this year to become the ninth state with zero income tax. Seattle, as you may know, is located in the state of Washington. So from 1998 to 2022, when Jeff sold at least $40 billion worth of shares, he paid ZERO DOLLARS in state income taxes. Had he lived in California during those years, he would have paid $5.2 billion thanks to its 13% maximum capital gains tax rate. So what changed in 2022? In 2022, Washington imposed a 7% capital gains tax on sales of stocks or bonds of more than $250,000. The moment the new tax went into effect, Jeff stopped selling. He sold no shares in 2022 and no shares in 2023. In November of 2023, Jeff took his talents to Miami. As you may know, Miami is located in the state of Florida.

$600 million

AKA, enough to fully cover the purchase price of his $500 million yacht with plenty left over to keep it sailing for decades to come. Jeff Bezos is not the first billionaire to move to Florida to avoid taxes on share sales and dividends. Another famous example is Oracle founder Larry Ellison. After more than 40 years of being a California resident, in April 2021 Larry paid $80 million for a Florida mansion. Larry owns 42% of Oracle, roughly 1.1 billion shares. Larry doesn’t sell his shares frequently. Instead, he funds his lifestyle, which includes yacht teams, a literal fleet of planes, a world-famous tennis tournament, and the entire Hawaiian island of Lanai, through income earned via Oracle dividends. Between 2003 and his 2021 Florida move, Larry earned $12 billion in dividends. Along the way, he paid the state of California $1.6 billion in taxes. Perhaps not surprisingly, Oracle’s dividend has nearly doubled since he moved to Florida in 2021, from $0.24 per share per quarter to $0.40 per share per quarter today. As the owner of 1.1 billion shares, that jump has increased Larry’s annual dividend income from $1 billion to $1.8 billion. And on those $1.8 billion dividend payments, he’ll save $230 million on taxes every year. Larry seems to be very much enjoying Florida life and the extra income it has put in his pockets. In June of 2022 he paid $175 million for an absolutely insane waterfront property not far from Palm Beach. Larry bought the home from internet entrepreneur Jim Clark, who bought it himself just 15 months earlier for $95 million. We call it the greatest home flip of all time. In August of 2022, Larry listed his original $80 million mansion for $145 million. He ultimately pulled the listing and still owns this house today.