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FACEBOOK CEO MARK Zuckerberg has said he will receive no tax benefit from donating billions to charities.
Zuckerberg and his wife, Priscilla Chan, created the Chan Zuckerberg Initiative following the birth of their daughter Maxima.
Over his lifetime, Zuckerberg plans to give away 99% of his Facebook shares, valued at the equivalent of €42 billion, to various initiatives.
However, he has moved to address criticism that this move could result in him paying less tax.
“The Chan Zuckerberg Initiative is structured as an LLC [Limited Liability Company] rather than a traditional foundation,” Zuckerberg explained. This structure behaves like a corporation.
As Bloomberg explained during the week, there are four main benefits to an LLC: There’s no limits on lobbying, it can turn a profit, it can get more involved with the private sector, and is not required to give away 5% of its value each year in donations.
Using an LLC will also give Zuckerberg more freedom over who they choose to fund.
“It will enable the creative and flexible use of capital over time,” Jacob Harold, chief executive of nonprofit database GuideStar, told The New York Times.
In a post today, Zuckerberg said:
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.
“It’s buying optionality, so that down the road they could still decide to direct money to nonprofits or they could choose to invest in really cool solar energy companies that are doing a lot of good.”
The Facebook co-founder is one of the world’s wealthiest men.
He and Chan, a 30-year-old pediatrician, have previously donated $100 million (€91.8m) to public schools in Newark, New Jersey, and pledged $120 million (€110m) to schools in poor communities of the San Francisco Bay Area.
They’ve also given $75 million (€68.9m) to the Zuckerberg San Francisco General Hospital, where Chan did her medical training.
Additional reporting by The Associated Press
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When cases are settled on the steps of the court house, the real winners are the legal profession.
I hope this system is an improvement and people get help when they need it, not years down the line when their lives are completely altered
€60000 for a broken finger. Somethings not right.
@Epgenetics29 Declan Christy: 60 grand might seem like a lot but over a lifetime it isn’t much. Personally if I had a choice between permanent damage to a hand or the money I’d rather have my body intact. I’d imagine most people would think the same
@Epgenetics29 Declan Christy: the judge must have had a lot of parking tickets
@Epgenetics29 Declan Christy: you didn’t read it. Not a broken finger. “suffers a permanent deformity” and that after 2 surgeries. But you’re faux rage comment is much cooler.
@Epgenetics29 Declan Christy: 60k for a permanent injury, plenty of Joe soaps getting a he’ll of a lot more for a lot less.
You sign up to do a job that carries certain amount of risk and how can the department of justice or the state be negligible if then you are assaulted in the course of your work that you signed up for and are aware of the risks ..my understanding of civil law is that someone had to be proved to be negligible to win a injury claim
have your say