How Jeff Bezos could save up to $600 million in taxes by making this ingenious move

Billionaire Jeff Bezos has made an ultimate tax-saving move by relocating to Miami from Seattle. This would reportedly help him save over $600 million in taxes on his mega sale of 50 million Amazon shares, as per CNBC’s calculations. Bezos announced the plan to unload the stock over the next year after his move to Miami last week. The Amazon founder left his Seattle mansion for an estate on the island of Indian Creek aka the “Billionaire Bunker”. He is still the second richest person in the world, according to the Bloomberg Billionaires Index with a net worth of over $200 billion, most of which comes from his Amazon stock.

Here's How Jeff Bezos’ Ultimate Tax Saving Maneuver Works

The Washington state imposed a 7% capital gains tax in 2022 on sales of stocks or bonds of more than $250,000. Before this, Bezos didn’t pay much taxes as the state doesn’t have a personal income tax.

Bezos has sold Amazon shares worth billions of dollars since 1998 to fund his philanthropic endeavors and his space exploration start-up Blue Origin. He has also bought assets worth millions of dollars, the most recent being a $500 million super-yacht named Koru. However, with the new tax imposed, Bezos for the first time faced state taxes on his stock sales.

Therefore, Bezos stopped selling Amazon Stock in 2022 when the new tax took effect. He didn’t sell any Amazon stock in 2023 except for gifting only $200 million worth of shares at the end of last year.

Soon, Bezos announced his plans to move out of Seattle after nearly 30 years and relocate to Miami. While Bezos stated that he was moving to be closer to his parents and his rocket launches at Blue Origin, the timing suggested that he was trying to work his way out of paying taxes. Bezos’s new home state Florida has no state income tax or a tax on capital gains.

Right after moving out, Bezos in an SEC filing revealed a pre-scheduled stock-selling plan to unload 50 million shares before January 31, 2025, Bloomberg reported. According to CNBC’s calculations, the stock is worth $8.7 billion according to February 12’s price.

Earlier this month, when Bezos sold about $2 billion worth of shares, he potentially saved $140 million that he would have paid to Washington state. Further on the entire sale of 50 million shares over the next year, he would save about $610 million, if the Amazon shares remain flat. This year alone, Amazon shares rose 15% this year alone and if they continue to rise, Bezos’ tax savings will also rise.

Thus, by 2025, Bezos’ tax savings alone will cover the cost of his superyacht Koru, which comes equipped with a helicopter landing pad swimming pool, and much more.

Further, the property taxes in Florida are 0.89% less than Washington’s real estate tax rate of 0.98%, according to Rocket Mortgage. Washington also requires residents with assets of $2.193 million or more to pay an estate tax ranging from 10% to 20% upon their death. If Bezos continued to live in Seattle and maintained his current net worth he would have to pay as much as $40 billion in estate taxes upon his death.

On the other hand, Florida charges no resident's estate tax and does not tax on capital gains as well.

Bezos' New Mansion In Indian Creek

In Indian Creek, Bezos bought two mansions worth $147 million in total and is reportedly looking at three other properties on the island, according to the New York Post.

As per the report, Bezos is likely to tear down the homes and build a mega-mansion that would be worth about $200 million.

Editor's note: This article was originally published on February 13, 2024. It has since been updated.