[BraveNewCurency]

Let's say Amazon is about to make $1B in profits. Instead, they go on a hiring spree, and quickly pay out $1B in salary. Ha ha, they say, we have a profit of $0, so we don't get taxed!

But that's good. The employees all made lots of money (and will be taxed on it, often at a higher rate than the corporation would have paid!)

So run the same scenario again, but this time say "stock options" instead of salary.

[ksec]

If they spend it on their HQ2, let say it is $2B, do they wipe of the $1 Profits this year, ( Paid no tax ), and Net Operating Loss of $1B, which get deducted next year. Assuming they make the same $1B profits next year, that is No Tax again right?

One of the problem I see is that many companies buy Asset like property asset to avoid taxes.

[matt_wulfeck]

Theres an important distinction in deferring taxes versus avoiding taxes. Every time they buy a peice of property there’s taxes on the sale. Every year there’s property taxes (very high in WA), then finally there’s a sale and guess what?

[ksec]

Sorry it was a hypothetical question, didnt know there is property tax in US.

[dustingetz]

so what happens when you pay with options? they pay corp tax which ends up less?

[ambernightcrush]

The employees who get stock options, is the assumption here. Which of the warehouse runners have equity from Amazon?