Jeff Bezos Sells $4 Billion in Amazon Shares Amidst Rally, Likely Saving Millions in Taxes by Moving to Florida

📝 SUMMARY: Jeff Bezos, the founder of Amazon Inc. ($AMZN), has embarked on a significant sell-off of his company shares, divesting 24 million shares worth more than $4 billion over four trading days. This recent activity comes shortly after Bezos announced a plan to sell up to 50 million Amazon shares, marking his first stock sale since 2021. The sales, detailed in regulatory filings, have occurred amidst a notable rally for Amazon shares, which were up 13% for the year through the last trading day Bezos sold shares. However, Amazon's stock saw a decrease of 2.2% the following day.

The rationale behind Bezos's large-scale sell-off remains unexplained officially. However, a strategic move seems evident with his relocation from the Seattle region to Miami, Florida, announced on November 2, followed by the adoption of a 10(b)5-1 trading plan on November 8. This timing is crucial, considering Washington state's introduction of a 7% capital gains tax in 2022—a levy nonexistent in Florida. By moving states, Bezos stands to save approximately $288 million in taxes, assuming the entirety of his Amazon stock's value is subject to capital gains, given his historical acquisition pattern of only ever buying a single share of Amazon.

This significant tax avoidance strategy not only highlights Bezos's financial acumen but also underscores the broader implications of state tax policies on individual and corporate fiscal decisions. Washington's capital gains tax, while a substantial revenue source, has faced criticism and potential challenges, including a possible repeal initiative set for a November ballot. This tax environment has already prompted notable relocations, including billionaire Ken Fisher's firm moving to Texas.

As Amazon and Bezos decline to comment on the sales, the financial community continues to speculate on the broader impacts of such moves, both for the individuals involved and for the states adjusting to the evolving tax landscape.

🔍 SOURCE: https://www.bloomberg.com/news/articles/2024-02-13/jeff-bezos-unloads-2-1-billion-of-shares-in-second-amazon-sale?srnd=premium