Mark Zuckerberg Defends Facebook Share Giveaway

Mark Zuckerberg has defended the unusual company structure chosen for the eye-catching philanthropic venture launched to celebrate the birth of his daughter, Max.

He will give away 99% of his stake in Facebook, worth $45 billion, to fund the Chan Zuckerberg Initiative.

Rather than set up a simple charity, the Facebook founder formed a limited liability company (LLC) to administer the money.

An LLC brings certain tax exemptions but also allows investment for profit.

Photo Facebook

Critics have said the structure of the Chan Zuckerberg Initiative could provide a way for Mark Zuckerberg to avoid paying tax on the sale of his shares. They have also questioned why he did not set up a not-for-profit charity instead.

An LLC allows Mark Zuckerberg to keep hold of the voting and allocation of the shares he puts into it.

In a Facebook post on December 3, Mark Zuckerberg explained his reasons for creating an LLC instead of a not-for-profit organization and said he and his wife, Priscilla Chan, will pay capital gains taxes when their shares are sold by the company.

“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,” he said.

“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,” Mark Zuckerberg added.

The new charitable organization is aimed at “advancing human potential and promoting equality for all children in the next generation”.

Mark Zuckerberg and Priscilla Chan’s shares will be donated over the course of their lives. They have already committed $1.6 billion to philanthropic causes according to a Facebook statement.

Nancy Clayson

Nancy is a young, full of life lady who joined the team shortly after the BelleNews site started to run. She is focused on bringing up to light all the latest news from the technology industry. In her opinion the hi-tech expresses the humanity intellectual level. Nancy is an active person; she enjoys sports and delights herself in doing gardening in her spare time, as well as reading, always searching for new topics for her articles.

Recent Posts

Spain: At Least 158 Killed In The Country’s Worst Flooding Disaster

At least 158 people have died in Spain's worst flooding disaster in generations. On October…

2 days ago

Russia Fines Google $20,000,000,000,000,000,000,000,000,000,000,000, Surpassing Global GDP

Google has been fined two undecillion (a two followed by 36 zeroes) roubles by a…

2 days ago

Financing Your Home Remodel: 7 Tips for Success

Embarking on a home remodel is an exciting journey, promising enhanced comfort, increased property value,…

2 weeks ago

Donald Trump Serves Up McDonald’s Fries While Kamala Harris Celebrates 60th Birthday with Church Choir

The US presidential candidates continued to campaign across key swing states on October 20. Footage…

2 weeks ago

America PAC: Elon Musk Promises to Award $1M Each Day to Swing States Voters

Elon Musk has said he will give away $1 million a day to a registered…

2 weeks ago

Canada Expels 6 Indian Diplomats Amid Khalistan Row

India and Canada have decided to expel their top envoys along with other diplomats as…

3 weeks ago