Our story begins with stock options that Musk received back in 2012 as compensation for his services as Tesla’s CEO. These options gave Musk the right to buy the shares at their 2012 price at any point he chose over the next ten years. In 2021, with the options trading at phenomenally higher than their 2012 price, he made that choice. He exercised his options to buy Tesla shares at the 2012 price, a move that caused the equity in those options to be taxable to him as wages. That became the source of the overwhelming bulk of Musk’s 2021 tax liability. More

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