Jeff Bezos sold $2 billion worth of stocks last week, and one benefit of this sale was that he didn’t have to pay state taxes on it.
In 2021, Bezos revealed on Instagram that he would be leaving Seattle, where he had lived for almost three decades, to relocate to Miami. He cited being closer to his parents and his company Blue Origin’s rocket launches as reasons for the move. However, the timing of the move also hinted at another motive: reducing his tax burden.
In 2022, Washington state introduced a fresh capital gains tax of 7% on the sale of stocks or bonds exceeding $250,000. Washington doesn’t have a personal income tax, so this new tax was the first instance where Bezos would encounter state taxes on his stock sales.
Since 1998, Bezos has consistently sold billions of dollars’ worth of Amazon shares almost every year for over twenty years. He used the proceeds to support his philanthropic endeavors, his aerospace company Blue Origin, as well as his recent purchases such as a $500 million mega yacht and several mansions, acquired together with his fiancée Lauren Sanchez.
Jeff Bezos Tax Strategies, Investments and Philanthropy Plans
In 2022, when the tax became applicable, Bezos halted his selling activities. He refrained from selling any Amazon stock in 2022 or 2023, opting instead to gift only $200 million worth of shares by the end of last year.
Following his relocation to Miami, Bezos made up for the pause in selling. Recently, a filing with the SEC disclosed that Bezos initiated a pre-arranged stock-selling plan to sell 50 million shares before January 31, 2025. Based on current prices, this would amount to over $8.7 billion.
Florida doesn’t impose a state income tax or a tax on capital gains. Therefore, on the recent $2 billion sale, Bezos avoided paying $140 million in taxes that he would have owed to Washington state.
Over the course of selling 50 million shares within the next year, he stands to save at least $610 million in taxes. This estimation is based on the assumption that Amazon shares maintain their current value. If the shares continue to appreciate, the worth of his shares and consequently his tax savings will increase even further.
In other words, Bezos has covered the cost of his 417-foot yacht, Koru, solely with the tax savings from residing in Florida.
Regarding his new residences, Bezos acquired two mansions in Indian Creek for $147 million and is rumored to be considering three additional properties on the island, where notable figures like Tom Brady and Carl Icahn also reside. Miami brokers anticipate that Bezos will likely demolish the existing homes and construct a new estate, with the total expenses for the new property estimated to exceed $200 million.
Jeff Bezos sold $2 billion in stocks, saving taxes by moving to Florida. Despite Washington’s new tax, his smart money moves and property buys, like a $500 million yacht and fancy homes, show his money smarts and giving nature amid moving and managing assets.