Mark Zuckerberg Will Donate 99% of Facebook Shares

[HockeyIlliterate]

Giving away 99% of one's shares in a company can be significantly different than "donating [one's] fortune" (or even donating 99% of one's fortune).

He could very easily sell 99% of his current holdings (and keep all the proceeds), retaining 1% of the shares, and then donate 99% of that 1% and keep his promise....

Also, in response to a question above, and based on the article, it appears that he plans to only donate $1B a year. By doing so, I'd imagine that his federal income tax liability for each year in which he donates will be zero.

[CorsiHockeyLeague]

I don't think that's how it works - or rather it wouldn't here. Even if you somehow make $50,000 a year and donate 50 million, you're still paying some income tax due to the limits on what credits you get.

Originally Posted by RougeUnderoos

This guy just said he's going donate billions of dollars towards curing disease, educating people, and feeding children. I know people don't like facebook and bla bla bla, but how is this a bad thing? The reaction so far in this thread is almost unanimously negative.

I'm pretty sure it all just flew over your head; this is obviously a good thing. People were either making jokes about it ("tax evasion" by giving all your money away) or poking fun at how silly the statement of purpose is.

[HockeyIlliterate]

Originally Posted by CorsiHockeyLeague

I don't think that's how it works - or rather it wouldn't here. Even if you somehow make $50,000 a year and donate 50 million, you're still paying some income tax due to the limits on what credits you get.

It has been a while since I really looked into this, and there may be some income limit phase-outs* that reduce the amount that can be deducted from the income tax due as a result of the charitable deduction, but for most people, if they give, say, $25,000 to a charity, they can deduct the full $25,000 off of their adjusted gross income, up until that amount becomes zero, thereby making their taxable income zero.

* For 2014, the income phase out appears to begin once your adjusted gross income is above $152,525, but there are ways to reduce that number as well....

[CorsiHockeyLeague]

I've never really dealt with it in any detail but my understanding - again this is Canada, not the USA - is that once you donate more than 75% of net income, anything over and above that, you don't get a credit for.

[FlamesAddiction]

Once you have a few billions, the number is pretty much meaningless. The money can never be liquid or accessible, and even if it was, a person can only own and manage so many things before running out of room and time, and not adding crazy amounts of stress.

I do commend Zuckerberg for doing the right thing (and make no mistake, this is the morally right thing to do), but I think this action is also condemnation to filthy rich people who don't do the right thing.

[RougeUnderoos]

Originally Posted by CorsiHockeyLeague

I'm pretty sure it all just flew over your head; this is obviously a good thing. People were either making jokes about it ("tax evasion" by giving all your money away) or poking fun at how silly the statement of purpose is.

I think it all actually flew over yours.

[Coach]

Originally Posted by FlamesAddiction

Once you have a few billions, the number is pretty much meaningless. The money can never be liquid or accessible, and even if it was, a person can only own and manage so many things before running out of room and time, and not adding crazy amounts of stress.

I do commend Zuckerberg for doing the right thing (and make no mistake, this is the morally right thing to do), but I think this action is also condemnation to filthy rich people who don't do the right thing.

I think that's kind of the point.

[CorsiHockeyLeague]

Originally Posted by RougeUnderoos

I think it all actually flew over yours.

I seriously doubt anyone truly thinks this is a bad thing.

[Phanuthier]

This thread is just full of stupid. Its a very selfless deed. MZ has never really been a guy about status, I know a few people who were early Facebook employees and some who went to university with him, and everyone has described him as humble as his charitable donations. He'll line up line everyone else at the cafeteria. He's commonly seen driving around in his humble Volkswagen Golf, instead of say, other un-named tech billionaires who are worshiped and drive fancy expensive cars parking in handicap spots cause they can afford it

[topfiverecords]

A charitable tax credit has nothing to do with it.

He isn't even moving money, he's transferring shares...to himself. From his left pocket to his right pocket. A charitable organization but it's one that he controls.

He can donate all the money to good causes, or swim through a pool of gold coins for all I care. I bet there's less tax implications between profiting from the sale of shares first and then donating a sum of money and a charitable organization giving causes shares or the proceeds of sales of the shares.

[CorsiHockeyLeague]

Again, if this was Canada, it wouldn't matter that he'd set up the charity as long as it was registered. Donations to it would still be eligible for credits.

[topfiverecords]

Originally Posted by CorsiHockeyLeague

Again, if this was Canada, it wouldn't matter that he'd set up the charity as long as it was registered. Donations to it would still be eligible for credits.

It's not a charity, it's a fund setup to give money to charities.

[V]

Originally Posted by Jason14h

As someone who doesn't even have facebook, and is against charitable donations 99% of the time, this is the .01% running their own non government charities and having the best chance at actually making a difference.

This is just begging for a follow-up rant, so I'd like to indulge you. What are you on about here?

[burn_this_city]

Originally Posted by Phanuthier

This thread is just full of stupid. Its a very selfless deed. MZ has never really been a guy about status, I know a few people who were early Facebook employees and some who went to university with him, and everyone has described him as humble as his charitable donations. He'll line up line everyone else at the cafeteria. He's commonly seen driving around in his humble Volkswagen Golf, instead of say, other un-named tech billionaires who are worshiped and drive fancy expensive cars parking in handicap spots cause they can afford it

Dude's pretty flashy, that golf is actually the upscale GTI

[firebug]

A fun example of scale of donations:

http://www.slate.com/articles/busine...ly_a_quiz.html

[CorsiHockeyLeague]

Originally Posted by topfiverecords

It's not a charity, it's a fund setup to give money to charities.

Again, in Canada, that is called a "charitable foundation" and provides tax receipts on the same basis as a charitable organization. In other words, at least up here, there's no difference in terms of the tax credit you get for donating to one of these.

[topfiverecords]

Originally Posted by CorsiHockeyLeague

Again, in Canada, that is called a "charitable foundation" and provides tax receipts on the same basis as a charitable organization. In other words, at least up here, there's no difference in terms of the tax credit you get for donating to one of these.

Again. What does Canada have to do with this? Last I checked Mark lived in California.

[CorsiHockeyLeague]

Wow, you're a champ at moving the goal posts when wrong, hey? I started by observing that I don't know how it works in the states, but if it's similar to Canada, then XYZ.

[Huntingwhale]

Never cared much for the guy. But anybody who does something like this that benefits humanity deserves respect.

Respect to you Mr. Zuckerberg. Respect.

[Goodlad]

http://says.com/my/news/what-no-one-...une-to-charity

The vehicle for his beneficence will be the Chan Zuckerberg Initiative LLC, a family-run foundation that he controls and through which he will maintain control of Facebook for "the foreseeable future."

A Facebook PR, while confirming to BuzzFeed News, said that the initiative is structured as an LLC, and not as a charitable trust
Which means that unlike a charitable trust, which is compelled to spend its money on charity, Chan Zuckerberg Initiative, LLC will be able to spend its money on whatever it wants, including private, profit-generating investment.

The Facebook founder is not giving away 99% of his Facebook shares all at once. He will be doing it over the course of the rest of his life.
says.com

Also, Michael Maiello points out in this Daily Beast piece:
Mark will deduct the fair value of his gift to his foundation from his taxable income in the year he makes the donation. A donor like Mark could realize a tax benefit equal to about one-third of the value of his gift. In this case, he stands to benefit as much as USD333 million, based on the USD1 billion he plans as his first transfer.

I'm extremely skeptical about the whole thing. Set up as a privately controlled LLC with an extremely vague mission statement.