[seats]

See this comment below. Also you could make the case that you are locking in the 15% LT cap gains rate, which could and likely will increase at some unknown point in the future.

>> The numbers on and analysis of his tax liability in the article are demonstrably wrong - at a level of error unworthy of The Economist. His tax liability is calculated on the value of the stock as of the date he renounces citizenship, which was last September. Today, Facebook is worth maybe $100 billion. Early this year, a private equity offering put the value at $50 billion. Last fall, who knows, and it's all subject to negotiation with the IRS - my guess is no more than $25 billion. That means he evades 75 % of the tax bite by renouncing citizenship, and will be paying at most maybe $125 to $150 million of that $500 to $600 million tax liability he would owe if he sold all his stock next week.

[jonshea]

If we assume that Saverin had to pay his taxes by selling shares at the same price at which the IRS assessed then, then my logic still holds. Saverin would have to sell 15% of his stock to pay the 15% tax.

If, as you suggest, he is able to sell his shares at a greater valuation than the IRS uses to calculate his exit tax, then you are correct. When you renounce your citizenship, I have no idea how long the IRS gives you to actually pony up the exit tax.