California resident Edwin Castro is the biggest lottery winner of all time, after hitting a $2.04 billion Powerball jackpot in 2022. But would he be liable under a proposed California law to tax the wealth of billionaires?
The answer, it turns out, is complicated and far from clear. But Castro’s case highlights the difficulty of pinpointing a taxpayer’s net worth with precision under the proposed new law, which has a complex approach to valuing real estate holdings.
When Castro hit the Powerball jackpot, he opted for the lump-sum payment of $997.6 million. After paying federal taxes at the top marginal rate of 37% (California doesn’t tax state lotteries), he would have walked away with around $629 million. But Castro’s wealth story doesn’t end there.
An analysis by Realtor.com® estimates that Castro’s current net worth is likely right around the crucial $1 billion threshold. For Castro and other wealthy Californians in this situation, who are potentially on the cusp of massive tax liability, the exact valuation and tax treatment of their assets by state tax collectors may become a vital question.
These wealthy Californians will be closely watching the results of the general election in November, when voters are expected to decide whether the California Billionaire Tax Act becomes law. If the measure qualifies for the ballot and is approved, it would impose a one-time tax of up to 5% on anyone with $1 billion in worldwide assets who was living in California as of Jan. 1, 2026.
“Once the Billionaire Tax Act is passed this November, individuals above the threshold $1 billion will be required to file a net-worth declaration with their 2026 state tax return,” says the Billionaire Tax Now coalition, which sponsored the measure.
Estimating Edwin Castro’s net worth
According to the Billionaire Tax Now coalition, led by a labor union, the proposed tax on the approximately 214 billionaires in the Golden State would raise $100 billion over five years, with 90% of funds going to healthcare and 10% to public K-14 education and state food assistance programs.
But how will the state identify these billionaires? The group points to “public data” and the Forbes real time billionaires list. Castro is not on the list, due to his take-home lump sum minus taxes falling short of the billionaire threshold.
However, Castro has had more than three years to make that $629 million grow. Could it have grown enough to make him a freshly minted billionaire, setting him up for a much larger than usual tax bill?
Most people with that amount of money don’t stick it in a savings account earning scant interest, which would make it easy for the government to pinpoint their net worth.
Instead, Castro, like most high net worth individuals, likely would have diversified his money—perhaps putting it into the stock market, properties, businesses, investment funds, and more glamorous assets like yachts, cars, art, and gems.
Only Castro and his wealth advisers (reportedly, high school pal Jacqueline Dilanchyan runs his family office and helps manage his winnings) know where his cash went, but it’s well known that the former architecture consultant has been snapping up real estate. His buying spree started in early 2023 and continued until at least April 2025.
There are his several trophy properties, which reportedly include a $4 million Altadena Japanese-style home for his parents, a $45.76 million Bel-Air mansion (which he reportedly picked up for “cheap,” as it was originally listed for $87 million), and a $25.5 million Hollywood Hills manse.
There is also a $3.8 million waterfront Malibu house, which was reduced to concrete pillars and smoldering wood during the January 2025 wildfires.
Records show that 14 burned out plots in Altadena, where Castro used to live, were sold in April 2025 to Black Lion Properties LLC, Castro’s real estate investment arm, headed up by his brother, Jesse. In total, records show he paid $10.4 million for them.
This brings his reported real estate holdings to a total valuation of about $74 million—factoring in that most of the properties have likely lost some value since they were purchased, according to Realtor.com data and estimates.
While that isn’t a trifle, the bulk of Castro’s wealth seems to be elsewhere. He would have had approximately $536 million left after purchasing the properties. If he put that into the stock market, he would have hit a remarkable bull run that saw the S&P 500 nearly double since January 2023, when he had control of his winnings. This, even with a big dip in March when the Iran war broke out.
That $536 million in an S&P 500 index fund would be worth about $938 million today based on underlying gains alone. With all dividends reinvested, it would be closer to $975 million.
Adding his real estate holdings, that would take his net worth to around $1.01 billion to $1.05 billion—just above the crucial threshold for the proposed billionaire tax.
Of course, Castro likely didn’t invest every spare penny that he hasn’t spent on real estate, and may have indulged in significant purchases or donated some of his winnings to charity. And he would have had expenses to pay, and taxes on any investment gains he cashed out.
It’s also possible that his investments have outperformed the benchmark S&P, putting him deeper into billionaire territory. But for the sake of an estimated net worth, it’s plausible that Castro’s total return on investment mirrored the S&P 500, putting him just above the proposed tax threshold.
With an estimated net worth below $1.1 billion, Castro wouldn’t be hit with the full 5% tax, but his wealth might still be subject to a one-time tax of 2.5% to 0.5%, based on the provisions of the bill. That would add up to a tax hit of around $26 million on the high end to $5 million on the low end.
Realtor.com reached out to Castro’s family office for comment but received no response.
How real estate is treated in the tax proposal
Because Castro’s real estate holdings are potentially what take him over the billionaire threshold, the tax bill’s treatment of those assets will be crucial in his case, and others who are on the cusp.
The billionaire tax would explicitly exclude real estate held directly by a taxpayer in their own name or revocable trust from calculations of net worth. But a spokesperson for the Billionaire Tax Now group confirmed that real estate held by an LLC or other corporate entities would be included in net worth calculations.
Because all of the real estate properties publicly linked to Castro are owned by LLCs, they would likely count toward his net worth.
For taxation purposes, that’s an unusual distinction, says Clayton Bland, chief wealth advisory officer for accounting and professional services firm CliftonLarsonAllen (CLA), who has been advising high-net-worth individuals in California for 27 years.
Bland tells Realtor.com: “An LLC in California that has more than one owner is by default treated as a partnership; however, an LLC with only one owner is disregarded for income tax purposes and the items of income or expense are treated on the appropriate form.
“In other words, real estate in a single-member LLC is [typically] no different, from a tax standpoint, than real estate owned individually.”
But this isn’t the way single-member LLCs will be treated in the billionaire tax valuation process, Bland notes. “Real estate owned by a single-member LLC will not be excluded from an individual’s net worth under the proposed billionaire tax,” he explains about the bill’s language.
“Ultra-wealthy taxpayers might be tempted to argue that a 100%-owned, tax-disregarded LLC is tantamount to a sole proprietorship and should thus be looked through since the economic reality is the same as direct ownership,” he says.
“However, absent any explicit provision to that effect, such an argument faces an uphill battle. The measure’s precise wording and structure—plus its authors’ decision to mention sole proprietorships but not disregarded LLCs—indicate that a taxpayer’s interest in a single-member LLC is meant to be valued like any other business interest.”
The bill has other exclusions, including some retirement plans, and $5 million of “harder to value assets” such as intellectual property rights and nonpublicly traded financial instruments.
Challenges of valuing a billionaire
For those like Castro whose assets hover near the threshold but are difficult to value down to the dollar, that task will be left to the California Franchise Tax Board (FTB).
“The initiative uses standard valuation methods already applied in federal estate and tax law. These are well established and routinely enforced by the state of California,” says the coalition on its website.
But Los Angeles-based international family lawyer Alphonse Provinziano, who specializes in high-net-worth divorce, says that calculating a wealthy person’s assets isn’t usually straightforward.
“I work with estate planning professionals that have managed assets all over the world, with trusts in Bermuda, Switzerland, and offshore trusts,” he tells Realtor.com. “The name of the game is asset protection.”
As for how California’s tax bureau will identify its billionaires, he says: “I think they’re hoping to cast the net as wide as possible. Maybe they won’t capture everyone, but if they can get a fraction, that’s probably what they’re looking for in terms of the tax revenue.”
He notes many of his high-net-worth clients are moving from California to tax friendly states such as Florida, Nevada, or Texas that allow for anonymous ownership, then establishing trusts.
“There will be a certain contingent of people who will pay the 5% and move on, but a lot of people will say they can spend a million dollars on lawyers and fight it, and if they win, they save a lot of money,” he says.
“There’s going to be a lot of time and resources spent by the Franchise Tax Board and the Attorney General’s Office going after people, but that takes money away from other things—like prosecuting criminals.”
Financial planner Melissa Pavone agrees that the FTB has its work cut out for it.
“How net worth is calculated is where things get nuanced,” she tells Realtor.com. “Illiquid assets, privately held businesses, concentrated stock positions, deferred compensation; these aren’t straightforward to value or plan around.”
Who’s next?
The wealth adviser Bland said his concern is that the billionaire tax is a slippery slope that will eventually see asset taxation trickle down to nonbillionaires.
“The legal framework and administrative machinery [for the new tax] will now exist, allowing it to expand further without an additional vote,” he says. “It’s plausible that over time the threshold will move from a billion to down to a $100 million. There are thousands of households that meet that threshold in the state. And tens of thousands with a net worth of over $10 million.”
“Once California has the valuation rules, the reporting system, and the audit teams, the challenges or the marginal cost of expanding it from $1 billion to $100 million is very, very low.”
He says it is difficult to know how the valuations will play out—especially for those who aren’t clearly above or below the threshold.
“What’s really important is just how unprecedented this really is,” he continues. “This isn’t income tax or capital gains tax. The core concern is valuation risk.”
“There’s the potential for overtaxation if valuations are too high.”
Contacted by Realtor.com, the FTB wrote in an email, “We don’t comment on proposed ballot initiatives, but FTB is aware of this measure and is tracking its progress.”
The labor coalition also says that a billionaire would have an opportunity to disagree with their valuation. No doubt, many will.
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