The news concerning Microsoft acquired LindedIn became widely concerned. It spent $ 26.2 billion to acquire LindedIn. LindedIn co-founder & CEO benefits a lot from this acquisition. In the meanwhile, he might need to pay for a great amount of tax.

Up to February, Hoffman held 11% of LindedIn shares. Considering the acquired price for each share is $196, he will make over $ 2.8 billion.

He lives in California. The tax he pays will be in accordance with both California tax law and Federal tax law. The Capital gain tax of California is 13.3%, so he possibly pays $ 370 million. Plus the Capital gain tax of Federal is 23.8%, he needs to pay about $ 1 billion in total.

“It is a good news that Hoffman earns a great amount of sum. In the meanwhile, the California government will receive a great deal of tax,” said Daniel Morris, the co-founder of Morris+ D’Angelo accounting firm.

It is not clear which measure Hoffman will take to avoid paying tax. Morris explained Hoffman has several options. First, Hoffman could donote $ 1 billion or more to charity organization. Hoffman and his wife Michelle Yee are high profile philanthropists. They once donated millions of Zynga shares to charity organization.

Another option is that Hoffman could make limited investments. He could put his assets into the startups to postpone paying tax.

To California, this capital gain tax is timely as its tax revenue declines. Fewer IPO and share selling and acquisition are the reason why the government received fewer revenue.