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Jesse Eisinger writes in the NYT that if you heard that Mark Zuckerberg donated $45 billion to charity, you are wrong. Here's what really happened: Zuckerberg did not set up a charitable foundation, which has nonprofit status. Instead Zuckerberg created an investment vehicle called a limited liability company (LLC) that can invest in for-profit companies, make political donations, and lobby for changes in the law. What's more an LLC can donate appreciated shares to charity, which will generate a deduction at fair market value of the stock without triggering any tax. "He remains completely free to do as he wishes with his money," writes Eisinger. "That's what America is all about. But as a society, we don't generally call these types of activities "charity.""
A charitable foundation is subject to rules and oversight. It has to allocate a certain percentage of its assets every year. The new Zuckerberg LLC won't be subject to those rules and won't have any transparency requirements. According to Eisinger what this means is that Zuckerberg has amassed one of the greatest fortunes in the world — and is likely never to pay any taxes on it. "Instead of lavishing praise on Mr. Zuckerberg for having issued a news release with a promise, this should be an occasion to mull what kind of society we want to live in," concludes Eisinger. "The point is that we are turning into a society of oligarchs. And I am not as excited as some to welcome the new Silicon Valley overlords."
Previously: Mark Zuckerberg to Donate $45 Billion Facebook Fortune to Charity
(Score: 0) by Anonymous Coward on Saturday December 05 2015, @02:57AM
Its called being poor on paper. The way an accountant explained it to me.
You look like you are making 18k a year. But your company makes 200k a year. But all the taxes are held inside the LLC. You think they cant setup a double Irish with a twist? Your company still has to pay taxes on *new* money. But existing money is a capex investment. It is the same way i can invest money into facebook itself. I buy shares. I am not taxed on that money until I sell the shares. The money invested can basically be disappeared. He even said how he is going to do it. He is going to use the LLC to invest it into other companies. If it worked your way. If I started a company and it was between me and 5 other people. They all invest 1 dollar. I invest 1 million dollars. Now with your way they all owe taxes on that one million. The way it works in the real world is typically I get more shares and they get less. The business gets the one million to invest as it sees fit.
Disregarded Entity would have one owner. Adding more owners is easy. They are all of your children, your family (aunts uncles, etc), your wife, etc...
You seem to think the accountants that achieved the effective 0 tax rate for facebook cant do the same thing for the LLC?