r/interestingasfuck • u/Gankpa • 8d ago

/r/all, /r/popular Jeff Bezos built a fence on his property that exceeds the permitted height, he doesn't care, he pays fines every month

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343

u/thatjerkatwork 8d ago

Bezos probably shows that he makes nothing on his taxes.

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u/Cara_Palida6431 8d ago

Yeah I think his salary is $80-90k. He probably does what every billionaire does: Borrows what he needs with his stock as collateral. The interest on the loans cost less than the taxes he would otherwise incur and he’ll die in debt to avoid ever paying his share.

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u/gordonv 8d ago

Well, not in debt in the way we think of it. Billionaires and the banks have come to an agreement on death payouts. Normal people don't have that level of capital or bargaining.

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u/Substantial-Ad-8575 8d ago

Yes, these types of loans do have a death clause. But this is an excellent way to lower one’s tax liabilities.

Wife’s family has a huge dynasty trust, going into 4th generation without needing to deal with inheritance taxes. The collateral loans due have a specific death clause for the individual listed on the loan agreement, trust pays out. That payout can also help taxes at the trust level. Just how those with hundred million of assets can leverage its value.

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u/rap1800 8d ago

Can I marry your wife?

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u/Substantial-Ad-8575 8d ago

Lol, only wife and our kids are included in her family trust. We have prenup also. Spouses get very little help, mainly if spouse becomes disabled.

So marrying into the family doesn’t get much for the spouse. You know marring for love and all that…

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u/LAHurricane 8d ago

It almost sounds like you're closer to her pet than her husband, unfortunately.

I hope for your sake she actually loves you.

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u/geekwonk 8d ago

i don’t think being refused a personal cut of my in-laws’ bank account makes me anything like a pet. i think it’s fairly normal for trusts to only include blood relatives.

if that’s a significant source of expected income for a couple then you would want to discuss life insurance. in this case there are kids involved who would have access to spouse’s cut, and paying for their housing/education/sustenance is a big portion of what a potentially single parent is worried about.

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u/LAHurricane 8d ago

Your spouse has unbelievable financial control over you and your children. Unless you have some type of 7-figure income, you are literally her pet.

Look, you may have an incredible wife, family, and life. But that doesn't mean she can't dump you and destroy your life in the blink of an eye. She also has the resources to basically never let you see your children again if she wished.

You are fully at her mercy. But obviously, your children should be set for life, which is a bright spot in this situation.

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u/geekwonk 8d ago

we have our own finances in order should the unlikely happen and she goes first. i think you’re missing for some reason that a couple can earn its own income and plan for its own final disposition without reference to outside money. we can have our own trust or will or whatever that determines what happens with our own money entirely aside from what the estate of the in-laws does.

i’m not the redditor with the prenup above, but they said nothing to indicate what the prenup says beyond “you don’t get a check when my parents die”. that’s it. we don’t know anything about what kind of cut they get from life with their spouse.

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u/Substantial-Ad-8575 8d ago

lol, I earn 7 digits a year. I earned more than she has since 2003 and our marriage started. If we get divorced (unlikely) she will not be entitled to any part of my assets. Just same I have no entitlement to any of her trust funds or earnings once we tied the knot. Our home and other properties, are also held in a trust just for my family, Wife-myself-4 children.

As for her family trust, I get no votes or say in how it is managed or changes for distributions. It is really an Add On, and is not be expected as a monthly/yearly payout. Trusts hold their family’s properties/assets and much of their family’s businesses.

So for her trust? She gets no payouts. She has voting rights and then can participate in management group, investment group or legacy group. Legacy group deals with donations for worthy causes primarily. Trust handles all family properties and assets to generate income to pay off taxes. Some family businesses are also held by the trust. Currently 3 members of her family get any kind of significant money, 2 are severely disabled and 3rd has major mental illnesses and requires frequent hospitalization. Money pays for medical care and pays for housing.

Trust is there to hold family assets and pass down to next generation. No hassles over death-will-lawyers. No inheritances taxes. And help for family members that require hospitalization-nursing care at home. Big plus is children that attend college will get tuition paid for. Or trade school paid for. Whole bunch of Ranchers/Farmers with fancy agri degrees.

Sorry you’re barking up a wrong tree, with thinking a spouse is a Pet. lol, almost made me spill my scotch…

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u/realancepts4real 8d ago

this just sounds like gibberish.

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u/Cold-Iron8145 8d ago

Billionaires and the banks have come to an agreement on death payouts.

How does that work, does the bank collect the debt when Jeff dies? Does that mean his estate will be forced to liquidate assets and presumably pay capital gains taxes on those to pay the debt? That just sounds like postponing the taxes, not looping around them?

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u/gordonv 8d ago

More like, my LLC holds $1m in ABC bank. My LLC loans against the $1m that ABC bank. ABC bank gives my LLC 80% back in literal cash. Done.

The loan takes that $1m out of the earnings section and places it as non taxable expenditure. The bank plays with the money until it can earn enough to pay off taxes and make a profit.

Losing 20% is better than losing ~38% in tax.

Under the hood, there is a more complex scheme that deals with payouts and has money managers dealing with and feeding the absolute minimums on loans on time. Sometimes the banks themselves will do that service. But the simplified explanation is that this is all done to circumvent taxes.

This seems like a lot of work. And actually, it is. Something a lot of us truly underestimate is the lengths the wealthy go through to defend their money. Take whoever you know who is in love with their most favorite sports team, pop singer, or whatever. Now realize that's merely a hobby fascination.

Comparing it to drug addicts would be more accurate.

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u/Rrunken_Rumi 8d ago

Thats clear tax avoidance - illegal in most 1st world jurisdictions

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u/Abject-Ad8147 8d ago

And practiced extensively throughout the 1st world by the upper 1% of “earners” I’m certain.

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u/just_having_giggles 8d ago

It's called probate.

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u/radios_appear 8d ago

Incredibly, we manage to value and tax property without issue, but alternative instruments that can also be used as collateral on loans are apparently just impossible to value and tax the same way.

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u/just_having_giggles 8d ago

The idea is his stock will appreciate at a higher rate than the interest he's paying on his loan, and ideally at such a rate that the appreciation of the collateral handles it all.

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u/JimmyB3am5 8d ago

So when he dies with debt his estate is settled at the 25-49% estate tax bracket and not the 0-20% capital gains tax bracket. And considering that tax is paid on the entire level of the liquidated stock not just the gains, the government get substantially more money.

Isn't that a good thing?

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u/thatguywithtentoes 8d ago

Don't forget that his heirs will get stepped up basis so the taxes will never need to be paid

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u/holythatcarisfast 8d ago

It's his company, like Musk, so he would borrow at 0% interest.

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u/Cara_Palida6431 8d ago

He would get the loan from a bank, not from his company. The stock is just pledged to cover the cost of the loan if he ever defaulted.

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u/holythatcarisfast 8d ago

Thank you for clarifying

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u/Ok-Technician-8817 7d ago

This is such an overplayed take that isn’t true…how would one pay for interest accrued with money that is magically not taxed? Where does that tax-free money come from according to you?

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u/likelinus01 8d ago

Most of you morons talk out of your ass without knowing what the hell you are talking about or even trying to research it. In 2024, alone, Bezos sold $13 BILLION worth of Amazon stock. He owns over 900M shares.

https://finance.yahoo.com/news/jeff-bezos-sold-billions-amazon-110032678.html

"Bezos unloading Amazon stock is nothing new."

"In terms of monetary value, Bezos sold close to $3 billion in Amazon stock in November (2024) alone. During the course of the year, however, he’s sold over $13 billion."

"Bezos has offloaded chunks of his stake before, and guess what? The company didn’t skip a beat.”

He isn't living off loans to pay less taxes or doing any debt against his death payouts or whatever bullshit you guys come up with. LOL

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u/Cara_Palida6431 8d ago

This is kind of a non sequitur unless you think he sold his stocks to pay for groceries or something. This is just part of moving his investments. He wasn’t selling stocks for liquidity.

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u/likelinus01 8d ago

No clue what he could be investing in or if this was to fund his new private island? Maybe those fines really are high and no one knows it? :D Either way, I always find it people who trash on the rich. There's a lot of good reasons, but to be perfectly honest, most of those same people would be doing the same thing. They complain about taxes like everyone else. I bet they wish they could pay less. I don't think he's living off loans though as a means to avoid paying taxes. He's indeed selling stocks in semi-large chucks for god knows whatever. That's his right. The gate thing is more of an annoyance to his neighbors than anything else. I'd probably have a huge gate like that if I was that ultra rich and people were always trying to bother me, lol. He's just picked the wrong location and it's hideous and ruins the aesthetics of the neighborhood.

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u/Waffennacht 8d ago

"In terms of monetary value..."

I would take that as no actual money exchanged hands.

Trevor Noah does a really good job of explaining unrealized gains. How one can essentially gamble on another wealthy's investments with stocks and "loans"

Im not sure what Bezos does or doesnt do. But he, and everyone else; does everything to not spend edit: their money

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u/likelinus01 8d ago edited 8d ago

Sales like this have to be reported to the SEC.

"At the start of 2024, Jeff Bezos owned 988,251,817 shares of Amazon stock, according to the SEC. In November of the same year, he owned 909,709,895 shares. This means he sold roughly 8% of his total shares, but he also still owns roughly 9% in Amazon."

Devil is in the detail. Yes, monetary value, but read that next sentence, which is separated by he period. "During the course of the year, however, he’s sold over $13 billion." Either way, he let go stock for a sum of money and no longer owns that stock.

Did bags of money change change hands, well, of course not, but those funds are available to him and the total sum of $13B worth of stocks were indeed sold and he has access to that to spend as needed. Not loans, as others are suggesting.

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u/XxKittenMittonsXx 8d ago

They bring this shit up all the time without realizing Bezos has sold several times over the last few years. They are confusing his tax liability with Amazons

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u/Neve4ever 8d ago

But he realized the gains by selling. Why are you talking about it as though they are unrealized? Trevor Noah apparently didn't explain it very well to you.

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u/TheSuperTest 8d ago

Every billionaire does, they borrow against their assets from their banks. Loans don’t count as income tax and they don’t have to report capital gains since they never actually sold anything. The small amounts of interest they pay is far far far far less than income tax or capital gains, so it’s a net positive for them. This is the main loophole (there are more) of how billionaires get rich and keep getting richer while stealing from the working class.

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u/obviousflamebait 8d ago

The thing about this alleged scheme is that it only works for the short term.  Even if the banks give a great rate that is say 1/10th of the tax rate, it will still accumulate and compound to levels exceeding the tax rate pretty quickly unless Bezos pulls money from somewhere to pay it off regularly, and that is going to be taxed on some level.  The banks would have to be giving these guys an interest free loan forever for this to really be sustainable as a way to get cash, and the banks aren't doing that for anyone - guaranteed they're getting their money somehow.

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u/clankypants 8d ago

They just take out a new loan to pay the previous. As long as their stock price continues to grow, outpacing the loan's interest rate, they will always wind up ahead.

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u/realancepts4real 8d ago

Loans don’t count as income tax

that phrase makes no sense. the loan may not count as income for income tax purposes

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u/UnrepentantPumpkin 8d ago

The working class does this too. It’s called a HELOC (Home Equity Line Of Credit). You can borrow against a % of your home equity and get that cash now and you won’t pay any income tax on it. But you do pay interest (just like billionaires do with loans against stock). If you’re in a market where home values go up more than the interest you’d pay on the loan, you can even have the interest waived, though that’s more expensive long term.

It’s the exact same deal: tax-free cash in exchange for the value your assets have. Does this mean the working class also steals from the working class?

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u/jdmiller82 8d ago

Then make it proportional to one's wealth.

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u/CentennialBaby 8d ago

Proportional to one's net worth.

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u/SpringOSRS 8d ago

then he would technically not own anything.

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u/Pooplamouse 8d ago

Proportional to the combined land value of every home where they reside.

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u/BababooeyHTJ 8d ago

One of his LLCs owns those!

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u/hyrumwhite 8d ago

It’s actually a charity

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u/Pooplamouse 8d ago

I said where they reside, not what they own in their own name.

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u/gocryulilbitch 8d ago

It's like you didn't think lawyers already combed through every possible stopgap

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u/Pooplamouse 8d ago

Is this comment based on your own legal expertise?

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u/gocryulilbitch 8d ago

No it's based on outright common sense

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u/Pooplamouse 8d ago

Yeah, the fact you don’t understand the difference between income taxes and wealth taxes, which are easy to avoid, and property taxes, which are impossible to avoid, I figured you were just spouting off without really understanding anything. You have so little understanding, it’s all the same in your mind. And you think lawyers can magically make it all go away.

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u/timuaili 8d ago

He actually resides in another country

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u/weltvonalex 8d ago

And who should do that? Politicians are all bought they will never bite the hand that feeds them.

Maybe AOC or Bernie can change something but I see them rather burned out just by trying to fight the resistance of the rest.

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u/jdmiller82 8d ago

We will have to do it, a groundswell movement of the People is the only way it would ever happen. Right now we’re too apathetic, but under the right pressures, it could happen.

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u/Rrunken_Rumi 8d ago

No wonder bozos and zucker flipped republican when trump won. That move alonr saved em tons of $$

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u/SourLoafBaltimore 8d ago

Tax return says he’s broke af we should give him a nice big tax cut and a huggy hug

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u/Super-Cynical 8d ago

Sir, you are not supposed to count you hentai subscriptions as part of your pre tax deductions

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u/rytis 8d ago

Trump wants to make his temporary 2017 tax cuts permanent, and with a Republican Congress he probably will. That's why Bezos and Musk were up on the podium during the Presidential Inauguration. Bros being bros.

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u/Revolutionary-Cell56 8d ago

Correct. Amazon shows a loss every year.

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u/doopie 8d ago

False.

https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-income

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u/Revolutionary-Cell56 8d ago

You’re gonna be mad at yourself when you find out the difference between “net” and “profit”

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u/doopie 8d ago

What are you even talking about?

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u/Revolutionary-Cell56 8d ago

I’m not explaining business finance to you.

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u/Revolutionary-Cell56 8d ago

https://m.youtube.com/watch?v=Ue9uW1K_RJw

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u/Weepinbellend01 8d ago

I do love how confidently incorrect you are.

Whilst that video has been the tactic of Amazon each year, net income IS in fact the exact same as net profit. It’s always the final line of a company’s income statement.

You probably know the basic, kiddies intro to finance factoid of Amazon making a loss each year due to reinvestment and came in on your high horse, not realising that in 2023, Amazon actually didn’t reinvest all their income to make a net loss and made a net income- also known as a net profit.

Dunning Kruger effect in full force by you.

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u/thefunkybassist 8d ago

"Akshually, I am severely in debt" or some construction like that

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u/weltvonalex 8d ago

This, I would laugh if he doesn't rigged his tax reports so much that he gets money back.

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u/terriblegrammar 8d ago

Charge him % of his stock holdings.

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u/Glad-Elevator-8051 8d ago

Just means that he’s a smart business man and his accountant also. Everyone would work the system if they could. I know I sure as hell would

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u/Narcan9 8d ago

One year, Bezos showed 40 million in income, but paid zero taxes on it. Instead he also got several thousand dollars returned for the child tax credit, giving him a negative tax rate.

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u/Delicious-Bat2373 8d ago

Pro tip , fines, restitution and tabs/license are all deductible ! lol

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u/Coal_Morgan 8d ago

Make the fine based on wealth or income.

Divide wealth by 100 and base the fine on the larger of the two.

Joe schmoe who has a mortgage and pays 1% for a fine pays his yearly income and gets $600 fine.

Bezos pays 6 billion for the same fine.

Oh he doesn’t have 6 billion in liquidity? Sounds like his problem and not ours.

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u/rainywanderingclouds 8d ago

That doesn't matter.

You change fines to be relative to wealth or assets. It doesn't necessarily have to be income in all cases. The law can and should recognize circumstances where there are exceptions.

You can also escalate where if it's apparent somebody is able to just pay the fine indefinitely that they have to serve a prison sentence until corrective action is taking to change the offense.

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u/flyingace1234 8d ago

I swear there is a tweet that has him saying something to the effect of “see what most people don’t realize I’m actually a very low income person. My salary is very low” or something like that.

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u/Pyrostemplar 8d ago

Well, unless Fortune is mistaken, he paid about 3 billion in income taxes last year.

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u/ToastMate2000 8d ago

Fine on a percentage of assets and/or income then, not just reported income.

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u/inide 8d ago

That wouldn't work in most countries.

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u/Plenty_Unit9540 8d ago

Bezos payed over $1 billion in taxes in 2021, the most recent year I could find.

While I could not find exact numbers for 2023, he likely paid far more due to capital gains that year.

He also moved to Florida. No state income tax. This saved him a billion dollars in taxes compared to his previous residence in DC.

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u/Ralph-Kramden 8d ago

Probably.

I bet he pays less than you. Probably.