It all depends on how exactly Tesla does the paperwork on those free cars. If fully taxable as personal income, then in Belgium that means ending up in the 52% tak bracket and a free Roadster will set me back €150k (as that's what it's likely going to cost over here). I hope there is some legal way around this to make it cheaper... Otherwise you're better off buying one at 98%, because then it's not a gift, since you still bought the car.
Not really. My quoted comment above was for US residents or taxable entities. It really doesn't matter how Tesla "does the paperwork." Receiving a 2% discount or 100% discount off the car, the discount is still fully taxable as 1099 income (again, US tax rules). In the US, there's no distinction of a "gift" or "award", etc to be taxed differently. It's all income as far as the I.R.S. is concerned, and they're going to want their cut (and hopefully not right away!) And even if Tesla doesn't send out 1099 forms to report the income to you, you are still legally obligated to report it. Another kick in the pants is that for most 1099-misc income, you'll have to pay the self employment tax (social security, medicare) which is currently 15.3%, which if you're a W-2 employee, your employer pays half. So you'll be paying 7.6% more in SE tax for the award amount.
The only possible "legal" way I see to avoid paying the income taxes on the award is to have a business that also has $250k of net expenses (or whatever your award amount is) to offset the income. But you'd still have to have a business spending $250k as real expenses.. and realize that the people/entities you've spent that $250k on for your expenses, you'll have to document that and send them 1099s, so
they'll have to pay tax on that, too. So really, in the end, someone is going to pay the taxes. Unless you just happen to have a real business with net $250k of extra expenses anyway, then you're lucky and might be able to pull something off along those lines and pay no taxes.
Just thought of another idea -- (don't know if this is valid), but if you sell some stock at a $250k loss, maybe you can offset the income? But you'd still have a $250k realized loss. Is that better than paying the taxes?
Besides that I don't know of any other legal way to avoid income taxes (but I am not a CPA, so there always could be), other than Tesla offering a "gross-up" to also give you cash to pay the tax on the award (and the taxes on the gross-up, etc, etc). Years ago I won a large award from AMEX and they grossed up the award to pay the taxes, which was really great. I don't think Tesla is going to gross-up 80 NGR awards.
I have no idea how they'll handle other countries, though.
