The Money Cruncher, CPA
@themoneycruncher.bsky.social
A licensed CPA talking about personal finance.
I write http://TheCrunch.co for 10,700 readers
Not a financial/tax advice
I write http://TheCrunch.co for 10,700 readers
Not a financial/tax advice
Having a solid tax strategy is crucial. You need to think long term and minimize your tax exposure.
If you found this thread helpful, please:
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If you found this thread helpful, please:
1. follow me @themoneycruncher.bsky.social
2. repost the first post
Bluesky
methemoneycruncher.bsky.social
February 19, 2025 at 2:12 PM
Having a solid tax strategy is crucial. You need to think long term and minimize your tax exposure.
If you found this thread helpful, please:
1. follow me @themoneycruncher.bsky.social
2. repost the first post
If you found this thread helpful, please:
1. follow me @themoneycruncher.bsky.social
2. repost the first post
Since the Nvidia stock is now owned in his name, he will receive a step-up basis adjustment to the fair market value (FMV).
His heirs will then sell the assets and pay $0 in income tax on the Nvidia shares.
His heirs will then sell the assets and pay $0 in income tax on the Nvidia shares.
February 19, 2025 at 2:12 PM
Since the Nvidia stock is now owned in his name, he will receive a step-up basis adjustment to the fair market value (FMV).
His heirs will then sell the assets and pay $0 in income tax on the Nvidia shares.
His heirs will then sell the assets and pay $0 in income tax on the Nvidia shares.
He could swap cash (borrowed against the trust's assets) into the trust, along with a promissory note.
After the swap, he would personally own Nvidia stock, offset by liabilities.
As a result, he would receive an indebtedness deduction and $0 in estate tax.
After the swap, he would personally own Nvidia stock, offset by liabilities.
As a result, he would receive an indebtedness deduction and $0 in estate tax.
February 19, 2025 at 2:12 PM
He could swap cash (borrowed against the trust's assets) into the trust, along with a promissory note.
After the swap, he would personally own Nvidia stock, offset by liabilities.
As a result, he would receive an indebtedness deduction and $0 in estate tax.
After the swap, he would personally own Nvidia stock, offset by liabilities.
As a result, he would receive an indebtedness deduction and $0 in estate tax.
But what about the step-up basis?
Good question.
Jensen would most likely use the "power of substitution" which allows him to exchange assets in the trust for assets of equal value.
Good question.
Jensen would most likely use the "power of substitution" which allows him to exchange assets in the trust for assets of equal value.
February 19, 2025 at 2:12 PM
But what about the step-up basis?
Good question.
Jensen would most likely use the "power of substitution" which allows him to exchange assets in the trust for assets of equal value.
Good question.
Jensen would most likely use the "power of substitution" which allows him to exchange assets in the trust for assets of equal value.
A GRAT freezes the estate's value at today's value.
Any future appreciation of assets passed to heirs would be free of gift and estate taxes, potentially avoiding ~$3.5 billion in taxes.
Any future appreciation of assets passed to heirs would be free of gift and estate taxes, potentially avoiding ~$3.5 billion in taxes.
February 19, 2025 at 2:12 PM
A GRAT freezes the estate's value at today's value.
Any future appreciation of assets passed to heirs would be free of gift and estate taxes, potentially avoiding ~$3.5 billion in taxes.
Any future appreciation of assets passed to heirs would be free of gift and estate taxes, potentially avoiding ~$3.5 billion in taxes.
He also further diversified his tax strategy by establishing a Grantor Retained Annuity Trust (GRAT) and moving 3,078,820 shares into it.
February 19, 2025 at 2:12 PM
He also further diversified his tax strategy by establishing a Grantor Retained Annuity Trust (GRAT) and moving 3,078,820 shares into it.
Today, after accounting for stock splits, those shares are worth approximately $3.4 billion.
Without the irrevocable trust strategy, his estate could have faced a $1.6 billion tax upon his passing.
Without the irrevocable trust strategy, his estate could have faced a $1.6 billion tax upon his passing.
February 19, 2025 at 2:12 PM
Today, after accounting for stock splits, those shares are worth approximately $3.4 billion.
Without the irrevocable trust strategy, his estate could have faced a $1.6 billion tax upon his passing.
Without the irrevocable trust strategy, his estate could have faced a $1.6 billion tax upon his passing.
According to SEC filings, Jensen transferred 584,000 shares to this trust on December 28, 2012.
At the time, these shares were valued at ~$6.5 million.
He paid a small gift tax on the transfer.
At the time, these shares were valued at ~$6.5 million.
He paid a small gift tax on the transfer.
February 19, 2025 at 2:12 PM
According to SEC filings, Jensen transferred 584,000 shares to this trust on December 28, 2012.
At the time, these shares were valued at ~$6.5 million.
He paid a small gift tax on the transfer.
At the time, these shares were valued at ~$6.5 million.
He paid a small gift tax on the transfer.
In 2012, he created an Irrevocable Trust.
This type of trust allows you to transfer assets out of your personal name and into the trust.
The key advantage? Assets within the trust aren't subject to estate taxes.
This type of trust allows you to transfer assets out of your personal name and into the trust.
The key advantage? Assets within the trust aren't subject to estate taxes.
February 19, 2025 at 2:12 PM
In 2012, he created an Irrevocable Trust.
This type of trust allows you to transfer assets out of your personal name and into the trust.
The key advantage? Assets within the trust aren't subject to estate taxes.
This type of trust allows you to transfer assets out of your personal name and into the trust.
The key advantage? Assets within the trust aren't subject to estate taxes.
Beyond the exemption amount, the remaining assets are taxed at up to 40% at the federal level.
Wealthy individuals, like Jensen Huang, use creative strategies to minimize this tax impact.
How?
Wealthy individuals, like Jensen Huang, use creative strategies to minimize this tax impact.
How?
February 19, 2025 at 2:12 PM
Beyond the exemption amount, the remaining assets are taxed at up to 40% at the federal level.
Wealthy individuals, like Jensen Huang, use creative strategies to minimize this tax impact.
How?
Wealthy individuals, like Jensen Huang, use creative strategies to minimize this tax impact.
How?
When your net worth exceeds a certain threshold ($13M in 2025), you become subject to the estate tax.
This tax applies to everything you own: cash, stocks, real estate, and other assets based on their total value.
This tax applies to everything you own: cash, stocks, real estate, and other assets based on their total value.
February 19, 2025 at 2:12 PM
When your net worth exceeds a certain threshold ($13M in 2025), you become subject to the estate tax.
This tax applies to everything you own: cash, stocks, real estate, and other assets based on their total value.
This tax applies to everything you own: cash, stocks, real estate, and other assets based on their total value.