Zuckerberg Pledges 99% of Facebook Wealth "to Advance Humanity"

[Josquius]

What a retard.
Why doesn't he do what rich people are supposed to do, invest money and create wealth and jobs while they get richer and invest more money and create even more wealth and jobs?

Sounds like that's what he is doing by avoiding this being a real charity.

[Tonitrus]

What is it, the Human Fund?

[Martinus]

The article criticising this is ridiculous but so is the claim that he donated the money to charity. I don't know enough about US tax law to comment but moving family money to a "foundation" or a similar organisation of sorts is a good method to optimise your tax structure and avoid inheritance taxes in most Western jurisdictions.

He is not an evil man for doing that (except perhaps by having Facebook spend millions of dollars each year on lobbying so politicians in Washington continue to turn blind eye to such loopholes) but neither he is necessarily Mother Theresa - there is not enough evidence yet.

[Martinus]

What is it, the Human Fund?

It very well may be something like that so I'd reserve my judgement and won't declare him Messiah just yet.

[Tonitrus]

What is it, the Human Fund?

It very well may be something like that so I'd reserve my judgement and won't declare him Messiah just yet.

Reading the article, it sounds like his own version of a Bill Gates-type charity.  But it says it won't just be doling money away, but also investing to help sustain itself (not a bad idea, really), and also implies it could be spending money on political/social projects as well.

[Martinus]

What is it, the Human Fund?

It very well may be something like that so I'd reserve my judgement and won't declare him Messiah just yet.

Reading the article, it sounds like his own version of a Bill Gates-type charity.  But it says it won't just be doling money away, but also investing to help sustain itself (not a bad idea, really), and also implies it could be spending money on political/social projects as well.

How is any of this different from what a normal company does?

[Baron von Schtinkenbutt]

How is any of this different from what a normal company does?

It isn't, which is why the new entity is going to be an LLC.  Zuckerberg is not getting any tax benefits whatsoever from this that he wouldn't get as an individual.  He is simply declaring that this new company is going to work towards the public good rather than being for the benefit of its members.

[Valmy]

The article criticising this is ridiculous but so is the claim that he donated the money to charity. I don't know enough about US tax law to comment but moving family money to a "foundation" or a similar organisation of sorts is a good method to optimise your tax structure and avoid inheritance taxes in most Western jurisdictions.

He is not an evil man for doing that (except perhaps by having Facebook spend millions of dollars each year on lobbying so politicians in Washington continue to turn blind eye to such loopholes) but neither he is necessarily Mother Theresa - there is not enough evidence yet.

I take it Marty has not read the thread.

Zuckerberg will gain zero tax benefits from doing this.

[Martinus]

Sorry but who in this thread provided any tax analysis of this move? Care to point me to the part I haven't read?

I said I don't know enough about US tax law to comment, but I have seen comments that by making it a share for share deal (instead of selling the shares), Zuckerberg will effectively pay no capital gains  taxes on the money he made by holding the shares and seeing their value increase - if true, that's a huge tax benefit. I assume he and his family will retain organizational control over the new company and its resources, so at the end of the day it does not matter if he formally doesn't "own" them - he will retain the same influence on the world by being in control of how such resources are spent.

I also assume that the charter of the company will guarantee such organizational control for Zuckerberg and his descendants (as is the usual practice in such cases) thus allowing for a seamless transfer of such influence without any inheritance taxes being payable. As I said, smart.

[Admiral Yi]

It's a huge tax advantage enjoyed by everyone who doesn't sell their shares.  You only pay capital gains when you sell at a profit.

[Berkut]

Wow Marty, you sure are working mighty hard to avoid giving any credit to the guy at all.

Of course he is smart - duh, we know that. And being smart, he is going to dedicate his money to the causes that he cares about in a smart manner. Again, duh.

But fundamentally, this is a very great thing. The guy is going to see his ridiculous wealth is used for a purpose that he finds noble, and will hopefully have a tangible effect on humanity.

He can do that in good faith, while at the same time doing so in a manner that protects the assets from simply going to the US government. Again...duh.

[Valmy]

Wow Marty, you sure are working mighty hard to avoid giving any credit to the guy at all.

Of course he is smart - duh, we know that. And being smart, he is going to dedicate his money to the causes that he cares about in a smart manner. Again, duh.

But fundamentally, this is a very great thing. The guy is going to see his ridiculous wealth is used for a purpose that he finds noble, and will hopefully have a tangible effect on humanity.

He can do that in good faith, while at the same time doing so in a manner that protects the assets from simply going to the US government. Again...duh.

If Marty was donating 99% of his money to causes he would be giving us a blow by blow commentary so we could all tell him how great he was

But Zuckerberg is not going to tax shelter route because he wants to be able to donate to whatever will further his objectives and not be limited to just going to non-profits and charitable organizations since he thinks Tech is the way forward. At least that is my understanding. I imagine some of it will be going to charities so there is that.

But if he just wanted to protect his money from taxes there are MUCH better ways to do this. Besides wouldn't the main point of Marty's inheritance tax scheme to encourage people to give all their shit away before they die anyway?

[Berkut]

I know - it feels like Marty's main beef is that Zuckerberg isn't just donating his billions to the Fed directly!

[Baron von Schtinkenbutt]

I said I don't know enough about US tax law to comment, but I have seen comments that by making it a share for share deal (instead of selling the shares), Zuckerberg will effectively pay no capital gains  taxes on the money he made by holding the shares and seeing their value increase - if true, that's a huge tax benefit.

I may be wrong, but one cannot do a stock-for-stock deal using shares owned by a person.  It can only use shares held by the corporation.  Furthermore, the target of the deal would then become part of Facebook, not remain an independent entity.  The only way for Zuckerberg to give money to an independent entity from his personal holdings is to sell stock and eat the tax, unless the entity is a 501(c) entity (which this one is not).

[Jacob]

From what I understand, the Bill & Melinda Gates Foundation has been doing some pretty good things with the Microsoft billions. If Zuckerberg ends up in that range, then that's a pretty good thing IMO.