Facebook co-founder renounces US citizenship

[Glacier]

Facebook Inc co-founder Eduardo Saverin has renounced his U.S. citizenship, according to an Internal Revenue Service report, days before the company's initial public offering.

The news, first published by Bloomberg on Friday, was based on an IRS notice late in April that named people "who have chosen to expatriate."

Facebook plans to raise as much as $10.6 billion in an IPO that is expected to value the company at as much as $96 billion.

The offering could leave Saverin, who once owned 5% of the company, with a hefty capital-gains tax bill.

Saverin has sold enough of his Facebook stake that he does not appear in IPO filing documents that list shareholders who own 5 percent or more of the company, though his holdings are still believed to be substantial.

A spokesman for Saverin did not reply to several requests for comment on why Saverin had renounced his citizenship.

ISLAND NATION

Saverin now lives in Singapore, an Asian city-state that has no capital-gains tax. There is a minimum 15% rate for long-term capital gains in the United States for people in higher-income brackets.

Saverin, who was born in Brazil, was educated in the United States at Harvard, where he co-founded Facebook with Mark Zuckerberg and others.

The question of American citizenship became a bit of a talking point this week as former Republican Presidential candidate Michele Bachmann revealed she had become a dual U.S.-Swiss citizen, then sought to return her new Swiss passport.

Renouncing citizenship is a complicated and lengthy affair involving a signed oath and an appearance before a U.S. diplomatic official, according to the U.S. State Department's website.

Giving up citizenship is an irrevocable act, according to the State Department.

According to the Internal Revenue Service report, those who gave up citizenship last quarter included Philip Radziwill, nephew of Jackie Onassis, the wife of assassinated former President John F. Kennedy.

[Queen K]

Tax evasion, sheer and pure. Just doesn't want to be helping the American economy with their need for funding airports, libraries, highways, social programs and on and on.....oh, all the things legions of FB followers use and need.

Putz.

A rich putz, but still a putz.

[grammafreddy]

Interesting. Makes me wonder how many more will do the same if the US is determined to raise income taxes and capital gains taxes for the wealthier folks and corporations.

[Glacier]

Look to France, gramma. Look to France. viewtopic.php?f=28&t=40601&p=1250621&hilit=french+election#p1250397

Of course, unlike France, Canada, and the rest of the industrialized world, the U.S. treats its ex-pats like North Korea, Saudi Arabia, Iran, and Venezuela, so the only way an American citizen can escape the grasp of Uncle Sam is through a citizenship renouncement.


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Welcome to the U.S.A. where you leave any time you like, but you can never check out.

[Bagotricks]

The US government develops a technology that enables this guy to make a website based on frivolous celebrity imitation that uses that technology (the internet) and then books it to "The Cayman Islands" when its time to pay back into the system that helped him make a fortune.

...and people on the thread are suggesting that he is doing it because "taxes are too high".

Why didn't he come to Canada, where our tax rate is half what the states is?

Why did he move to a place with NO tax?

It couldn't be because people are greedy. No way - taxes are too high.

[grammafreddy]

The US government develops a technology that enables this guy to make a website based on frivolous celebrity imitation that uses that technology (the internet) and then books it to "The Cayman Islands" when its time to pay back into the system that helped him make a fortune.

...and people on the thread are suggesting that he is doing it because "taxes are too high".

Why didn't he come to Canada, where our tax rate is half what the states is?

Why did he move to a place with NO tax?

It couldn't be because people are greedy. No way - taxes are too high.

Have no idea why you would think he hasn't been "paying back into the system" since he first started making money.

[Captain Awesome]

It won't save him from paying capital gains on his Facebook shares. Any accountant would tell him that.

[grammafreddy]

Look to France, gramma. Look to France.

I did, I did, Glacier. Funny how some folks don't learn from other's mistakes. Have to singe their fingers themselves, so to speak.

Oh well.

[The Green Barbarian]

Why didn't he come to Canada, where our tax rate is half what the states is?

.

I assume you have a source for this statement Bago? The article quotes the tax rate on capital gains in the US at 15%. In BC you'd pay 22% on your capital gains. Other provinces other than Alberta, higher than that. The last time I looked 22% is not half of 15%.

[grammafreddy]

Why didn't he come to Canada, where our tax rate is half what the states is?

.

I assume you have a source for this statement Bago? The article quotes the tax rate on capital gains in the US at 15%. In BC you'd pay 22% on your capital gains. Other provinces other than Alberta, higher than that. The last time I looked 22% is not half of 15%.

What's the federal tax on capital gains?

[Captain Awesome]

What's the federal tax on capital gains?

I believe it's combined. Though your capital gain tax is depending on your personal income too - for somebody who makes $40K it's around 10% percent, for somebody who makes over $140K it's 22%.

[grammafreddy]

My financial advisor told me just last week that if I have a personal income of about $60,000 my tax bracket is 42% - federal and provincial combined.

Now, that's not to say that's what my income is, just what the tax would be IF I had that much income.

[Captain Awesome]

My financial advisor told me just last week that if I have a personal income of about $60,000 my tax bracket is 42% - federal and provincial combined.

I don't know where he got that from - some funny math there. Even your marginal rate wouldn't be that high.

On straight personal income tax it would be less than 20%.
On dividends - around 6%.

[grammafreddy]

I don't know where he got that from - some funny math there. Even your marginal rate wouldn't be that high.

On straight personal income tax it would be less than 20%.
On dividends - around 6%.

In total taxation? Both fed and prov??

[Captain Awesome]

In total taxation? Both fed and prov??

Yup.

On $60K:

Tax Payable: $12,169.60
After Tax Income: $47,830.40
Average Tax Rate: 20.28%
Marginal Tax Rate: 29.70%

Doesn't include CPP and EI contributions.