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Close Loophole that Gives Facebook a $3 Billion Tax Break

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Uploaded on Feb 29, 2012

Tax loopholes distort economic incentives and often benefit the wealthiest among us at the expense of most U.S. taxpayers.

Under current law, Facebook can tell investors, regulators and the public that the stock options Mark Zuckerberg received cost the company a mere 6 cents a share. But the company can also file a tax return claiming that those same options cost the company something close to what the shares actually sell for later on - perhaps $40 a share. And the company can take a tax deduction for that far larger amount.

The company can also carry forward the so-called losses arising from this tax deduction up to 20 years into the future.

Altogether, this loophole could give Facebook a tax break of up to $3 billion.

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