Facebook founder Mark Zuckerberg recently announced that he and wife Priscilla Chan plan to give away 99 percent of their fortune over their lifetime. Zuckerberg announced he would be funneling his money into the Chan Zuckerberg Initiative LLC, an actual corporation under his control.
For about an hour, Zuckerberg was lauded as a hero for his decision but later his name has come under scrutiny over how his new venture was established and what, specifically, he plans to spend the money on. Some opined Mark is planning to get tax benefits by announcing this.
Zuckerberg explained about this in a follow-up post clarifying that his new venture isn't giving him tax benefits or intended to make a profit on the side.
"By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively. In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC." Posted Mark Zuckerberg
Mark and his wife deserve credit, of course, for pledging to use their huge cash to help wider humanity rather than wasting it away on a life of fun.
For about an hour, Zuckerberg was lauded as a hero for his decision but later his name has come under scrutiny over how his new venture was established and what, specifically, he plans to spend the money on. Some opined Mark is planning to get tax benefits by announcing this.
Zuckerberg explained about this in a follow-up post clarifying that his new venture isn't giving him tax benefits or intended to make a profit on the side.
"By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively. In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC." Posted Mark Zuckerberg
Mark and his wife deserve credit, of course, for pledging to use their huge cash to help wider humanity rather than wasting it away on a life of fun.