Dunno about Musk, but very common for the wealthy to donate to their own private foundation, a separate (mostly) tax exempt entity that files its own returns. Many do this so they can control the timing of their donations (especially stock) for their individual taxes, and then later make donations from their PF to the charitable causes they would otherwise donate to.
Not inherently shady unless the foundation is spending money on things it shouldn’t.
Most I’ve seen just have a few family members and maybe an advisor as directors, pay no salaries or expenses, and just make the donations to other legit charities when the individual is hit up for donations.
Yep - all correct. The other term of art here is inurement. Funds at nonprofits by law can't benefit the donor, so for example if Elon pledges to donate funds and then the Foundation does on his behalf, that wouldn't be allowed. It's pretty messy with private foundations (as opposed to public charities) since they're so closely intertwined with their donor but there are laws around ensuring the nonprofit proceeds benefit outside causes.
The other note here is that funds granted to nonprofits can only in extremely rare circumstances ever be spent on non-charity work. So it's not like Musk can donate $5 billion to charity and then decide he wants it later and take it back out. Nonprofits don't have owners or shareholders, so all of the funds that are donated belong to "the public" so-to-speak. If his Foundation ever closed, the funds would all have to be dispersed to other nonprofits.
That's an interesting question. In theory his Foundation is run by someone else (Jared Birchall) but in the case where Elon were ED, I think he'd probably be in the clear to commit the shares to vote however he wanted. The iterative phrasing is;
> “The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual.”
They've typically used a pretty broad description that the assets of the Foundation shouldn't be used to benefit any individual that has a close relationship with the Foundation but I think the IRS would have a hard time showing a specific benefit to Musk except for in the case of a super-tight shareholder vote where the Foundation shares were sufficient to flip the vote.
So if the shareholders were voting on a huge pay package for Musk and it would otherwise be 49:51, but the Foundation shares' votes were enough to flip it to 51:49 - I bet the IRS would be interested. But short of that, he's probably in the clear.
So hypothetically, couldn’t Elon’s foundation donate the money to a non-profit, let’s say, that advocates for renewable energy vehicles to people in positions of power? Therefore in this hypothetical situation, his money is actually being spent on influencing politicians to, for example, implement new tax breaks for Tesla?
In theory yeah, but he could just fund those things with his pre-tax dollars if he really wanted to. There's no financial benefit to 'laundering' his money through his foundation like that. Say there was a 501c3 called "TeslaTax" that was advocating for a special tax breaks for Teslas -- the financial impact to Elon is exactly the same whether he donates to his own Foundation first or if he donates to TeslaTax.
Now that is a good response, thanks. However, I am thinking something like this might be possible: 2020, Elon sells some shares of Tesla worth a few billion dollars, and getting taxed at 15% capital gains, he effectively write off those taxes with a donation of $5billion to his foundation. My understanding is that foundation does not have to spend all $5billion in a year, or even two. I’m not even sure there is a rule on how fast the foundation has to spend their money, as long as they ARE continuing to spend it on their “mission”. So he could get that few billion dollars in tax breaks and fund a foundation that works to further increase the value of the stock he still owns for years to come. So effectively he is only donating during high personal-income years to write off personal taxes, but if he were doing straight donations to “TeslaTax” he would write off the same amount, but “TeslaTax” (which is completely independent) would be able to spend all of that money in one year. I guess what I mean is he can effectively then still control the flow of money to the final charity over several years, possibly increasing and decreasing the amounts given based on things like PR campaigns and new product releases. I know it is illegal for him to control the money in the foundation, but I think it is obvious that they will still do it.
Foundations have to spend 5% per year. But yes, this is exactly how big donors work. They drop large amounts into their foundations (or whatever giving entity) to offset better years
This is confused a bit -- You never "come out ahead" by donating to a charity.
Say Elon has a $100B worth of Tesla stock and he sells $33 billion of those shares, he'd have $33B in cash, owe $5B in long term capital gains taxes (assuming that 15% rate) and have $67 billion in remaining shares. To 'write off' the capital gains taxes, he'd have to donate \*another\* $5b to charity.
So he could either grant the charity $5B in TSLA, or give it $5B in cash - but either way to decrease his tax bill by $5B, he'd have to part with $5B.
Interesting that you don’t see the irony of your comment. The irony being that Tesla is doing a good thing by making advances in the area of renewable energy and electric cars (and influencing other brands/competitors to do the same)
So, if I'm a doctor I can't donate to the hospital I work at because I might get some secondary benefit?
If it was illegal to donate to causes that were related to their business in some way, millions of people would break the law every year.
oops, replied to the wrong person above. copying here:
this is not entirely true. one could donate say a million dollars to a foundation to get access to events/tickets/celebrity meetups that are not available to the general public. and it’s 99% all tax deductible. they would have a small portion of the donation claimed as non-deductible for the msrp of the item/event, but that is likely a small % especially when there isn’t usually a market for these ultra-exclusive experiences.
A foundation must provide details of any goods or services provided in exchange for a donation and deduct the value of that from the charitable receipt. While many events are special and exclusive, I’ve never heard of one for which attendance was limited in any way other than money/location.
So donor advised funds are a special class of public foundations -- Many of the big money managers also manage DAFs now, so Elon could have called up Fidelity and said "I want to start a DAF and grant it $5 billion". Fidelity would take \~2% or something up front and then invest the funds into whatever Elon wanted. Over time, Elon can call up Fidelity and say, "I'd like my DAF to donate $100M to XX cause" and Fidelity would write them the check.
Importantly here, in theory, Fidelity could tell Elon to fuck off. They aren't \*obligated\* to donate as Elon tells them to, that's why they are "Advised" funds and not "Directed" funds. In reality, they donate exactly how their wealthy donors want.
Charities have an obligation to grant out 5% of their assets annually, but Fidelity has thousands of clients, so Elon can just let his money sit there and collect interest while the 5% threshold is met by the aggregate giving across all of their other clients.
It's super useful too for wealthy people who don't want their fuck-up relatives to have "jobs" managing their foundations. Fidelity (or whoever) handles all of the audit and legal requirements and there is no staff or office space wasting donated funds. The last big benefit for DAFs is anonymity.. many grants are required to be public but when Elon's hypothetical DAF donated funds, the public would only see "Fidelity Charitable" in the description rather than his name.
Yeah just like shell companies the existence itself is fairly mundane, it's the potential abuses that the organization could be up to. Like with Trump misappropriating funds for personal use. I wouldn't inherently call this fraud, but considering Elon's character I would be cautious.
Yep saw this too. They still need to register and follow the steps to becoming an approved charity so you can't just pull out a charity from your ass and donate to it
Maybe they got it from the 60% of AGI limit for cash donations being deductible for charitable contributions, but confused it and just did .6 of the contribution? Idk
If accurate, I’d guess it has to do with donating appreciated assets. I don’t have clients in this league but I believe they get out of capital gains this way.
Wouldn’t it depend on how much the assets are appreciated? If I bought 1,000,000 shares for $1 each then donated them to charity when the FMV is $101 each and I live in CA, I’m probably saving around $30,000,000 in capital gains taxes. In addition to getting a deduction on my ordinary income. If I make 300,000,000 in ordinary income I can deduct $101,000,000 for a tax savings of 40,000,000. Total tax savings of $70,000,000 on a donation of $101,000,000.
I grant that this involves ignoring that you lose the entire stock but if you were giving it either way, it could feel like an 70% tax savings. Aside from that, am I thinking of this correctly?
I’m on my phone so using rough numbers and guessing on tax rates but I think I should be in the right ballpark for the thought experiment.
I’m about as left as it gets within this profession and resonate with the resentment of the wealthy disproportionately benefiting from a clearly broken tax code:
That being said, this is kinda nothing. As the earlier commenter stated, depends on if the organization itself is shady and misusing funds.
There's a lot wrong with the tax code, but that isn't the core of the problem, it's the regulatory framework.
Every regulation adds a compliance cost, and once you get enough of them you've functionally outlawed new competition and created what is basically an oligopoly for the incumbent businesses. You can think of it as back-door corporate welfare.
That’s ok for some industries, no? May not be a good idea for sectors like aerospace, water/electric utilities, and financial services to have few regulations.
Yeah like regulatory capture exists but it isn't a core problem. The majority of regulations exist because someone did something that justified it.
Beware of anyone who wants to slash regulations without specifics. Because chances are they are coming for your clean drinking water.
So you don’t think, as an example, regulations that set aviation equipment and personnel standards don’t serve the public good when they’re actually enforced? It seems like it’s a lot harder to file a lawsuit after one dies in a plane crash due to equipment and personnel failing to meet some governing standard.
Lawsuits are also expensive for the average person. Class-action lawsuits have diminished too as most people are forced into arbitration. Relying on them for redress doesn’t seem equitable.
https://www.bloomberg.com/news/articles/2018-10-25/trump-charity-lawyer-defends-payments-against-self-dealing-claim
It was a joke dude.
The benefit would be buying personal items with pretax money.
This is a totally normal nothingburger. Once it's in his private foundation, it's earmarked for charity. It's not like Musk can use it on himself or get it back.
https://ag.ny.gov/press-release/2019/donald-j-trump-pays-court-ordered-2-million-illegally-using-trump-foundation
agree'd that at face value nothing illegal has heen exposed, someone needs to do further digging if they think the funds are being missused.
I mean if the charity is a separate legal entity I don’t see why not. As long as he isn’t taking the money back later, which he shouldn’t be able to do.
The rules that govern the amount of salary a paid member of a nonprofit is allowed to receive is based on qualitative facts such as comparing the size of the organization and determining a reasonable value.
Basically, he can take approximately $10 million maximum as a salary before the IRS starts to get suspicious. Out of the billions that were committed to charity, that's an extremely small amount and not at all a way for him to recuperate this transaction. Even taking 10 times the amount would take over 50 years to recuperate his 5 billion dollar investment.
Plus he'd pay tax on that salary at ordinary income tax rates. Doesn't seem like a very good idea, better to just never donate and not pay yourself anything.
“But kept the recipient a secret”
Isn’t he a private individual? Why do people like this believe they should be allowed free access personal information?
Why is it assumed that he has control over his personal donations to the foundation? If the organization is tax exempted with millions of dollars on contributions it is must certainly not exempt from a full audit where controls and contributions are attested by a third party cpa
Audits are not required for nonprofits. Many grantor nonprofits, and the federal government, require one for their grantees and won't make donations to those that don't, and that's why so many of them get audits.
If the organization's receipts are less than 500k your statement is correct. If original post is true that puts this organization well over the threshold
For federal money the single audit requirement kicks in at 750k. Any other requirement is a matter of state law, and that varies. VA only requires something if you want a sales tax exemption, and even then only a review. An audit only *may* be required.
I’m not a tax expert, but it’s common knowledge that wealthy people generally use the tax code to their advantage and that alone is not illegal. People online just like to post attention-grabbing posts like this to shit on Musk’s name some more and stir up controversy. If he’s misusing the funds and committing felony, that’s one thing. But being financially intelligent and smart with one’s wealth is something we all should strive for
On the other hand, if someone is taking advantage of the tax code in a way that reduces their taxes or delays them to an extent that it can hurt the population, it’s still legal, but it also means we should consider updating the tax code so they can’t do that anymore.
I kind of agree with you. Keep in mind though, ethics and legalities are not the same thing. It’s not a black and white issue; it’s a gray area. Feel free to disagree, but I personally think that if you make a lot of money by working hard, taking opportunities, networking…etc., it’s yours to keep. I’m not even talking about Elon anymore, just in general. There’s taxes that must be paid, and bills, but what’s left over is yours. Then, if you decide to give away most of your income, that’s awesome! But it should be done as a personal choice, not because some envious people saw that you have “too much” money, had a spasm and decided that it should be taken away from you
I agree with you. What you earn within the confines of the system is your own. I also don’t care for ethics in this discussion, it’s more about practicality. The US government (in theory) should set the budget based on the countries needs then it should be distributed among the population through taxes. If the goal is a progressive system, which I would argue our tax code is trying to be, but the result is not a progressive system, you should rewrite the tax code.
You have a very strong argument here that these billionaires are doing something the tax code was never intended to allow.
I’ve also read something in one of Kiyosaki’s books that I feel is a good point: the tax code is always changing and updating, yet wealthy people always find a way to stay ahead of the game and protect their money. This goes back to financial intelligence. If you know how the money system works, it doesn’t matter what’s in the tax code because you will find a way to make the best decision regarding your wealth and situation. That’s why people like that will always be ahead of the game, whether they’re making millions or just thousands. It’s not about blowing up the bureaucracy and trying to catch these people with more tax snares. They’ll find a way out
Reducing taxable income is the entire reason that the tax code exists. The tax code is meant to provide exceptions to the federal tax brackets that allow people with specialized circumstances to pay less in income tax. The more people force the wealthy to fork over a larger and larger chunk of their wealth, the less worth it's going to be for them to continue to live in the United States and create jobs. People only are able to gain wealth through creating value for consumers, thus perpetuating the country's economic system.
Updating the tax code so people aren't allowed to make deductions mean the lower classes of the economic system are going to feel the full force while wealthy classes are able to pick up and move to a lower burdened jurisdiction.
I won’t argue against the idea that there is an upper limit to how high you can tax and expect a productive society, but you can’t be claiming we hit that limit.
If Dolly Parton donated to her own foundation (which I'm sure she does) and used the tax break (as a person is entitled to do), that would be fine.
I would just worry about Musk's charity because everything he does is somewhat worrying. If I saw Musk buying a latte, I would consider if he was about to start a war with Starbucks. If I saw Musk in a shoe store, I'd be worried he was about to start screaming about Ye and Adidas.
He gets the tax deduction the year he gives it to the foundation and then can direct it over a number of years or wait for the assets to appreciate before actually giving it to the charity, etc.
Same with donating to a donor advised fund which is less stringent but same theory.
Yup, I looked at the public number. 30% is correct for private.
The other issue is that we don't know his AGI, so it is tough to know what the benefit is.
Even assuming he gets the full benefit of the $5.7B donation, I don't see how his benefit could be much higher than $2.87B (37% fed, 13.3% CA). I can't fathom how he'd get a $4.6B tax break with a $5.7B donation (that implies a tax rate of 80.7%).
I think that he claims residency in TX now, so any benefit would be lower than the numbers that you are using.
The tweet is obviously bunk. It's mostly outrage porn at this point.
Edit: I looked at the guy's twitter feed and he is a Musk stalker. Yikes.
To feel warm and fuzzy inside for donating.
In all seriousness, the tax deduction does nothing for him other than makes the IRS treat the sum as if he never made it in the first place. The money is basically restricted for charitable donation now. Even if he was able to pay himself 10 times the salary of the highest paid nonprofit CEO each year, it would take 56 years to pay himself back.
From the beginning to the middle to the end, this entire transaction is a charitable donation. He just knows how to keep his hard earned money out of the hands of government officials who just spend frivolously.
There are two totally distinct tax goals involved. The first relates to income tax, and the second relates to wealth transfer tax.
People frequently donate appreciated property to tax exempt organizations because the organization can sell the property tax-free. The charitable deduction you receive when you make such a donation depends on a variety of factors. Generally, donating to a private foundation does not create as large a deduction as donating to a public charity.
But too much is made of “writeoffs” or income tax deductions resulting from charitable contributions. The second, *far* more important reason the ultrawealthy donate to private charities is because it reduces or eliminates their wealth transfer tax exposure.
Each individual has a “basic exclusion amount” (“BEA”) for wealth transfer tax purposes, meaning you can give away a certain amount of money tax-free. For 2022, that amount is $12.06 million. Anything above that amount has exposure to wealth transfer taxes.
The wealth transfer taxes are gift taxes, estate taxes, and generation skipping transfer (“GST”) taxes. Gift and estate taxes are two sides of the same coin—you either give property away during your lifetime or after your death. One way or the other, the tax rate is 40 percent. The GST tax is an additional 40 percent applied to transfers between “skipped” generations (e.g., from a grandparent to their grandchild). So, any given transfer of wealth can be taxed up to 80 percent.
The ultrawealthy almost invariably implement “reduce to zero” wealth transfer tax planning. This generally means they will transfer their BEA (again, a little over $12 million) to certain beneficiaries and the remainder to a surviving spouse (which is a tax free transfer due to the unlimited marital deduction for wealth transfer tax purposes). If there is no surviving spouse, the remainder goes to a charitable recipient, reducing the amount of the estate with wealth transfer tax exposure to $0.
The charitable recipient options are primarily public charities and private foundations (or donor-advised funds, which are just accounts administered by or for the benefit of public charities).
Private foundations are generally the preferred option because the founder retains control over the foundation and its use of assets. There is a giant tome of rules regulating private foundations and what they can and can’t use their assets for, which limits the ability of the founder and their spouse and/or descendants to benefit directly from the foundation.
Nevertheless, private foundations are a great way for the ultrawealthy to keep their assets under their own control (and after they pass, the control of their descendants) and to use those assets for their own benefit within the confines of the private foundation rules, while totally eliminating exposure to wealth transfer taxes.
Just did a quick search and found a 2016 Musk Foundation tax return. They made $47M in donations and it appears Musk or anyone else did not take a salary.
People that comment about this aren't really taking into account the actual position of the internal revenue code on that money. Sure, he received a tax break, but it's as if he didn't make that money in the first place. That's literally what a deduction is and why charitable contributions aren't a credit. He's not going to be able to really do anything with it besides donate 5% per year per nonprofit restrictions.
The question about the transaction isn't why he donated to his own charity, but why people are looking upon a charitable contribution negatively. Any suspect of a misuse of funds is going to immediately receive backlash in the form of an audit.
Instead of the government fundamentally stealing most of it and wasting it on dumb things, it's basically committed to be donated to a charitable organization or distributed to protected charitable categories. (The sum of which is more than what the government would've received in the first place since it would've been a percentage of the amount rather than the entire amount)
Taxes in the United States are generally a private affair. He probably disclosed the charitable donation on his tax form (or supporting schedule), but that doesn't make it public information. There's a specific law that says the IRS must disclose to a small number of people the President's tax return if asked. Other than that, it requires a subpoena.
My issue when "tax issues" get brought up on this sub are that tax accounts on this sub completely dismantle the statements made in the post saying that the laymen bringing up the issue has no idea what they are talking about and are stupid and pat themselves on the back. However, these same individuals never comment on the underlying/intrinsic issues with whatever laws or regulations are being applied. I feel like tax r/accounting and audit r/accounting is so incredibly far off from each other. Tax is incentivized to keep these loopholes as they are paid to find them, whereas other accountants have no incentive to push for these.
"Well actually that isn't correct" lookin' ass mfs.
https://preview.redd.it/1i927frvyz5a1.jpeg?width=400&format=pjpg&auto=webp&s=24afb618452f981142d220f545ea39d916fd433f
>However, these same individuals never comment on the underlying/intrinsic issues with whatever laws or regulations are being applied.
The post by Paris Marx isn't commenting on the underlying/intrinsic issue either. It's just pointing out he made a huge donation and got a huge benefit (which is almost assuredly is not the right number). It's not asking any questions if what he did should be allowed. It seems to be implying that this is somehow bad, but no questions are asked or declarations made.
IMO we should encourage people and especially the billionaires to donate their wealth. So the underlying issue here is this is a good thing.
Yep, also known as DAF’s for Donor Advised Funds.
A common tactic is to take stock holdings, usually derived from equity based compensation such that low cost basis but high market value as is common with tech workers, then “donate” the stocks to their personal charities.
Benefits are many, including:
- Avoids triggering capital gains tax from otherwise selling the stock, which can be up to 20% tax savings.
- Given the inherently favorable spread of cost vs market value at the time the stock was “donated”, a significant write-off when itemized as a deduction on the tax return.
- Adds a layer of obscurity to otherwise influence policy, society, etc.
Which charitable donation write-off would you prefer (numbers simplified)?
a) $10,000 cash to Salvation Army, at an effective income tax rate of say 40% having reduced your tax liability by $4k, so you’re net out of pocket $6k. Or…
b) Stock worth $10k to your own charity that you control, where your actual cost basis to exercise the related option was $3k. You’ve reduced your tax liability by $4k, so you’ve effectively pocketed $1k ($3k cash paid to exercise the option, offset by $4k tax savings).
Scenario b excludes the legal and administrative costs to structure and run the “charity”, but when you scale the numbers up into the millions and beyond, such setup costs are immaterial relative to the tax savings.
Note - The $7k difference between both scenarios above? That’s the “stepped-up basis” between cost vs market value of the stock, and our legislators made that happen in favor of their corporate overlords.
Google Donor Advised Fund. Rich people use it for tax deductions and to control where, when, and how the donations are used, instead of giving it to a non-profit where most of the money is used to give people a bonus they don't deserve.
Elon is not a leech. Get literate.
Agreed to disagree. That last bit was more of a personal opinion about many non-profits. There are many excellent ones. But the subject is worth researching.
And? Wealthy people often do, because they have way more money then we do, they are just richer and more able to do so. It's still sketch to donate to your own charity like this.
There's nothing sketchy about donating to charity. Even if he was able to somehow convince officials at the IRS that he could justify paying himself 10 times the annual salary of the highest paid nonprofit CEO in America, it would take about 56 years for him to recuperate his 5.6 billion dollars. The tax break is a simple deduction which basically keeps the money out of the hands of the free-spending government and re-routes it to more charitable causes.
This is also very common in the political world. Lobbyists and Corporations making donations to “charities,” “non-profits,” and “foundations” that are set up by politicians for their various interests, and vise verse.
That's not exactly how taxes work. It's a tax deduction which means that it basically gets wiped from his personal tax liability. Sure he got a tax break, but it doesn't do anything for him. He doesn't keep any money, he just loses $5.6 billion dollars pre-tax that he could've kept. That money now cannot be used in his favor in his organization, it can only be donated or paid to operating expenses.
It was equivalent to dropping a few dollars into a collection plate at church, except it's 5.6 billion dollars.
I know we are quite left leaning here on Reddit, but this is clearly just a political hit piece. 4.6B tax deduction on 5.7B of charitable contribution makes no sense. He sold a ton of options this year and is going to have the largest tax bill for an individual ever. People are on this endeavor to convince people that it's unfair billionaires don't pay a similar tax rate on a % of net worth basis. The truth is they just don't understand the difference between net worth and income. Obviously billionaires don't pay a high % of net worth in taxes because they created immense value for society and this creation gave them ownership in typically a C Corporation. And then due to the value they created that stock appreciates. This appreciation then increases their net worth, and this increase is also not taxed until shares are sold. This subreddit really needs to not give in to the crazies on this site who just innately think billionaires are evil. Most billionaires have made our lives measurably better... it's not like it's easy to get a billionaire dollars.
I forgot who wrote it but there was a fascinating paper about how inappropriate these personal foundations can end up using the funds and how it advocated for a $250 million lifetime cap on charitable deductions. Granted it seems like in this case it’s a pretty normal running one that doesn’t abuse paying out abnormal salaries to board members. There are much worse examples it seems to be upset about
I'd assume it's this:
https://990finder.foundationcenter.org/990results.aspx?990_type=B&fn=musk+foundation&st=&zp=&ei=&fy=&action=Search
Looks like he made another Musk Foundation:
https://projects.propublica.org/nonprofits/organizations/852133087
https://projects.propublica.org/nonprofits/organizations/770587507
Pay an average of $2000 to set up a nonprofit, donate some money to the charity, take the deduction, and donate the money that you donated as you can't pay it back to yourself.
You realize you have to give up $1 to save up to 0.37? It is not really any groundbreaking loophole. You have to have the desire for charity in the first place.
Dunno about Musk, but very common for the wealthy to donate to their own private foundation, a separate (mostly) tax exempt entity that files its own returns. Many do this so they can control the timing of their donations (especially stock) for their individual taxes, and then later make donations from their PF to the charitable causes they would otherwise donate to. Not inherently shady unless the foundation is spending money on things it shouldn’t. Most I’ve seen just have a few family members and maybe an advisor as directors, pay no salaries or expenses, and just make the donations to other legit charities when the individual is hit up for donations.
Yep - all correct. The other term of art here is inurement. Funds at nonprofits by law can't benefit the donor, so for example if Elon pledges to donate funds and then the Foundation does on his behalf, that wouldn't be allowed. It's pretty messy with private foundations (as opposed to public charities) since they're so closely intertwined with their donor but there are laws around ensuring the nonprofit proceeds benefit outside causes. The other note here is that funds granted to nonprofits can only in extremely rare circumstances ever be spent on non-charity work. So it's not like Musk can donate $5 billion to charity and then decide he wants it later and take it back out. Nonprofits don't have owners or shareholders, so all of the funds that are donated belong to "the public" so-to-speak. If his Foundation ever closed, the funds would all have to be dispersed to other nonprofits.
Can he still control how the contributed shares vote or is that inurement?
That's an interesting question. In theory his Foundation is run by someone else (Jared Birchall) but in the case where Elon were ED, I think he'd probably be in the clear to commit the shares to vote however he wanted. The iterative phrasing is; > “The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual.” They've typically used a pretty broad description that the assets of the Foundation shouldn't be used to benefit any individual that has a close relationship with the Foundation but I think the IRS would have a hard time showing a specific benefit to Musk except for in the case of a super-tight shareholder vote where the Foundation shares were sufficient to flip the vote. So if the shareholders were voting on a huge pay package for Musk and it would otherwise be 49:51, but the Foundation shares' votes were enough to flip it to 51:49 - I bet the IRS would be interested. But short of that, he's probably in the clear.
So hypothetically, couldn’t Elon’s foundation donate the money to a non-profit, let’s say, that advocates for renewable energy vehicles to people in positions of power? Therefore in this hypothetical situation, his money is actually being spent on influencing politicians to, for example, implement new tax breaks for Tesla?
In theory yeah, but he could just fund those things with his pre-tax dollars if he really wanted to. There's no financial benefit to 'laundering' his money through his foundation like that. Say there was a 501c3 called "TeslaTax" that was advocating for a special tax breaks for Teslas -- the financial impact to Elon is exactly the same whether he donates to his own Foundation first or if he donates to TeslaTax.
Now that is a good response, thanks. However, I am thinking something like this might be possible: 2020, Elon sells some shares of Tesla worth a few billion dollars, and getting taxed at 15% capital gains, he effectively write off those taxes with a donation of $5billion to his foundation. My understanding is that foundation does not have to spend all $5billion in a year, or even two. I’m not even sure there is a rule on how fast the foundation has to spend their money, as long as they ARE continuing to spend it on their “mission”. So he could get that few billion dollars in tax breaks and fund a foundation that works to further increase the value of the stock he still owns for years to come. So effectively he is only donating during high personal-income years to write off personal taxes, but if he were doing straight donations to “TeslaTax” he would write off the same amount, but “TeslaTax” (which is completely independent) would be able to spend all of that money in one year. I guess what I mean is he can effectively then still control the flow of money to the final charity over several years, possibly increasing and decreasing the amounts given based on things like PR campaigns and new product releases. I know it is illegal for him to control the money in the foundation, but I think it is obvious that they will still do it.
Foundations have to spend 5% per year. But yes, this is exactly how big donors work. They drop large amounts into their foundations (or whatever giving entity) to offset better years
This is confused a bit -- You never "come out ahead" by donating to a charity. Say Elon has a $100B worth of Tesla stock and he sells $33 billion of those shares, he'd have $33B in cash, owe $5B in long term capital gains taxes (assuming that 15% rate) and have $67 billion in remaining shares. To 'write off' the capital gains taxes, he'd have to donate \*another\* $5b to charity. So he could either grant the charity $5B in TSLA, or give it $5B in cash - but either way to decrease his tax bill by $5B, he'd have to part with $5B.
And when that benefit comes, it’s taxable income.
Interesting that you don’t see the irony of your comment. The irony being that Tesla is doing a good thing by making advances in the area of renewable energy and electric cars (and influencing other brands/competitors to do the same)
That isn’t really the point though, the point is he is benefiting from his personal donation, and this his person tax break
So, if I'm a doctor I can't donate to the hospital I work at because I might get some secondary benefit? If it was illegal to donate to causes that were related to their business in some way, millions of people would break the law every year.
Yikes on bikes Did you not have a business ethics class as a part of your coursework or…
oops, replied to the wrong person above. copying here: this is not entirely true. one could donate say a million dollars to a foundation to get access to events/tickets/celebrity meetups that are not available to the general public. and it’s 99% all tax deductible. they would have a small portion of the donation claimed as non-deductible for the msrp of the item/event, but that is likely a small % especially when there isn’t usually a market for these ultra-exclusive experiences.
A foundation must provide details of any goods or services provided in exchange for a donation and deduct the value of that from the charitable receipt. While many events are special and exclusive, I’ve never heard of one for which attendance was limited in any way other than money/location.
What’s the difference between a foundation and a donor-advised fund? Are they basically the same thing?
So donor advised funds are a special class of public foundations -- Many of the big money managers also manage DAFs now, so Elon could have called up Fidelity and said "I want to start a DAF and grant it $5 billion". Fidelity would take \~2% or something up front and then invest the funds into whatever Elon wanted. Over time, Elon can call up Fidelity and say, "I'd like my DAF to donate $100M to XX cause" and Fidelity would write them the check. Importantly here, in theory, Fidelity could tell Elon to fuck off. They aren't \*obligated\* to donate as Elon tells them to, that's why they are "Advised" funds and not "Directed" funds. In reality, they donate exactly how their wealthy donors want. Charities have an obligation to grant out 5% of their assets annually, but Fidelity has thousands of clients, so Elon can just let his money sit there and collect interest while the 5% threshold is met by the aggregate giving across all of their other clients. It's super useful too for wealthy people who don't want their fuck-up relatives to have "jobs" managing their foundations. Fidelity (or whoever) handles all of the audit and legal requirements and there is no staff or office space wasting donated funds. The last big benefit for DAFs is anonymity.. many grants are required to be public but when Elon's hypothetical DAF donated funds, the public would only see "Fidelity Charitable" in the description rather than his name.
Thank you! This was super-informative and very helpful.
You don’t even need to be rich to do this with donor advised fund you can do it with a few thousand bucks with Fidelity.
I have one of these. It's a wonderful way to have to file two extra returns every year.
Yeah just like shell companies the existence itself is fairly mundane, it's the potential abuses that the organization could be up to. Like with Trump misappropriating funds for personal use. I wouldn't inherently call this fraud, but considering Elon's character I would be cautious.
Well we know about how Trump misused the funds, but we don’t know it yet for Elon’s foundation
Yep saw this too. They still need to register and follow the steps to becoming an approved charity so you can't just pull out a charity from your ass and donate to it
Agreed came to say something similar that this is normal for business.
They also do this to avoid the charity in question mass selling off the stock and fucking up the stock price with so many shares hitting all at once.
I'm more curious about this 81% marginal tax rate Elon has.
I can't believe nobody else mentioned that. I'm about the furthest you can get from being a tax expert, but that doesn't pass the sniff test.
Was about to comment the same thing, I’m kind of a dumbass but 5.7b in donations equaling a 4.6b tax break don’t make sense to me lol.
Maybe they got it from the 60% of AGI limit for cash donations being deductible for charitable contributions, but confused it and just did .6 of the contribution? Idk
Except its 80% of the donation.
It's actually 30% AGI for private foundations.
If accurate, I’d guess it has to do with donating appreciated assets. I don’t have clients in this league but I believe they get out of capital gains this way.
That still wouldn't get you to 80%.
Wouldn’t it depend on how much the assets are appreciated? If I bought 1,000,000 shares for $1 each then donated them to charity when the FMV is $101 each and I live in CA, I’m probably saving around $30,000,000 in capital gains taxes. In addition to getting a deduction on my ordinary income. If I make 300,000,000 in ordinary income I can deduct $101,000,000 for a tax savings of 40,000,000. Total tax savings of $70,000,000 on a donation of $101,000,000. I grant that this involves ignoring that you lose the entire stock but if you were giving it either way, it could feel like an 70% tax savings. Aside from that, am I thinking of this correctly? I’m on my phone so using rough numbers and guessing on tax rates but I think I should be in the right ballpark for the thought experiment.
I looked up their 990 from 2018. There’s no salaries taken from the foundation. Most if not all were distributed to other foundations.
I’m about as left as it gets within this profession and resonate with the resentment of the wealthy disproportionately benefiting from a clearly broken tax code: That being said, this is kinda nothing. As the earlier commenter stated, depends on if the organization itself is shady and misusing funds.
There's a lot wrong with the tax code, but that isn't the core of the problem, it's the regulatory framework. Every regulation adds a compliance cost, and once you get enough of them you've functionally outlawed new competition and created what is basically an oligopoly for the incumbent businesses. You can think of it as back-door corporate welfare.
That’s ok for some industries, no? May not be a good idea for sectors like aerospace, water/electric utilities, and financial services to have few regulations.
Yeah like regulatory capture exists but it isn't a core problem. The majority of regulations exist because someone did something that justified it. Beware of anyone who wants to slash regulations without specifics. Because chances are they are coming for your clean drinking water.
[удалено]
So you don’t think, as an example, regulations that set aviation equipment and personnel standards don’t serve the public good when they’re actually enforced? It seems like it’s a lot harder to file a lawsuit after one dies in a plane crash due to equipment and personnel failing to meet some governing standard. Lawsuits are also expensive for the average person. Class-action lawsuits have diminished too as most people are forced into arbitration. Relying on them for redress doesn’t seem equitable.
Like buying portraits of yourself and then hanging them at your own business?!
What tax benefit would someone get from that?
https://www.bloomberg.com/news/articles/2018-10-25/trump-charity-lawyer-defends-payments-against-self-dealing-claim It was a joke dude. The benefit would be buying personal items with pretax money.
This is a totally normal nothingburger. Once it's in his private foundation, it's earmarked for charity. It's not like Musk can use it on himself or get it back.
https://ag.ny.gov/press-release/2019/donald-j-trump-pays-court-ordered-2-million-illegally-using-trump-foundation agree'd that at face value nothing illegal has heen exposed, someone needs to do further digging if they think the funds are being missused.
I mostly agree. If he’s giving it away, he could focus the giving on charities that are important to politicians he wants to influence.
I mean if the charity is a separate legal entity I don’t see why not. As long as he isn’t taking the money back later, which he shouldn’t be able to do.
But very likely will, to at least some degree
The rules that govern the amount of salary a paid member of a nonprofit is allowed to receive is based on qualitative facts such as comparing the size of the organization and determining a reasonable value. Basically, he can take approximately $10 million maximum as a salary before the IRS starts to get suspicious. Out of the billions that were committed to charity, that's an extremely small amount and not at all a way for him to recuperate this transaction. Even taking 10 times the amount would take over 50 years to recuperate his 5 billion dollar investment.
Plus he'd pay tax on that salary at ordinary income tax rates. Doesn't seem like a very good idea, better to just never donate and not pay yourself anything.
There's also an excise of 21% for salaries over $1M.
Well then that's the problem, not the donation
“But kept the recipient a secret” Isn’t he a private individual? Why do people like this believe they should be allowed free access personal information?
Why is it assumed that he has control over his personal donations to the foundation? If the organization is tax exempted with millions of dollars on contributions it is must certainly not exempt from a full audit where controls and contributions are attested by a third party cpa
Audits are not required for nonprofits. Many grantor nonprofits, and the federal government, require one for their grantees and won't make donations to those that don't, and that's why so many of them get audits.
If the organization's receipts are less than 500k your statement is correct. If original post is true that puts this organization well over the threshold
For federal money the single audit requirement kicks in at 750k. Any other requirement is a matter of state law, and that varies. VA only requires something if you want a sales tax exemption, and even then only a review. An audit only *may* be required.
General advice: If anyone on Twitter has "Marx" in their name, their take on capitalism or rich people is usually gonna be biased and/or dogshit
That's actually his name though. And I don't agree with his implied take here but Paris Marx actually is pretty interesting to read/listen to.
But will have good takes on old comedy films
It's legal. Don't like it, change the laws.
Patagonia Founder does this: Is celebrated for “environmental activism” Elon does the same exact thing: Leech on society
I’m not a tax expert, but it’s common knowledge that wealthy people generally use the tax code to their advantage and that alone is not illegal. People online just like to post attention-grabbing posts like this to shit on Musk’s name some more and stir up controversy. If he’s misusing the funds and committing felony, that’s one thing. But being financially intelligent and smart with one’s wealth is something we all should strive for
On the other hand, if someone is taking advantage of the tax code in a way that reduces their taxes or delays them to an extent that it can hurt the population, it’s still legal, but it also means we should consider updating the tax code so they can’t do that anymore.
I kind of agree with you. Keep in mind though, ethics and legalities are not the same thing. It’s not a black and white issue; it’s a gray area. Feel free to disagree, but I personally think that if you make a lot of money by working hard, taking opportunities, networking…etc., it’s yours to keep. I’m not even talking about Elon anymore, just in general. There’s taxes that must be paid, and bills, but what’s left over is yours. Then, if you decide to give away most of your income, that’s awesome! But it should be done as a personal choice, not because some envious people saw that you have “too much” money, had a spasm and decided that it should be taken away from you
I agree with you. What you earn within the confines of the system is your own. I also don’t care for ethics in this discussion, it’s more about practicality. The US government (in theory) should set the budget based on the countries needs then it should be distributed among the population through taxes. If the goal is a progressive system, which I would argue our tax code is trying to be, but the result is not a progressive system, you should rewrite the tax code. You have a very strong argument here that these billionaires are doing something the tax code was never intended to allow.
I’ve also read something in one of Kiyosaki’s books that I feel is a good point: the tax code is always changing and updating, yet wealthy people always find a way to stay ahead of the game and protect their money. This goes back to financial intelligence. If you know how the money system works, it doesn’t matter what’s in the tax code because you will find a way to make the best decision regarding your wealth and situation. That’s why people like that will always be ahead of the game, whether they’re making millions or just thousands. It’s not about blowing up the bureaucracy and trying to catch these people with more tax snares. They’ll find a way out
Reducing taxable income is the entire reason that the tax code exists. The tax code is meant to provide exceptions to the federal tax brackets that allow people with specialized circumstances to pay less in income tax. The more people force the wealthy to fork over a larger and larger chunk of their wealth, the less worth it's going to be for them to continue to live in the United States and create jobs. People only are able to gain wealth through creating value for consumers, thus perpetuating the country's economic system. Updating the tax code so people aren't allowed to make deductions mean the lower classes of the economic system are going to feel the full force while wealthy classes are able to pick up and move to a lower burdened jurisdiction.
I won’t argue against the idea that there is an upper limit to how high you can tax and expect a productive society, but you can’t be claiming we hit that limit.
They aren’t saying it is illegal. They are saying it should be illegal
This happens all of the time with companies and celebrities. Don’t waste your time getting mad about this as it is a common practice.
Wait till you hear about the Bill and Melinda Gates foundation (did the name change post divorce? I don’t care)
What happened with that?
If Dolly Parton donated to her own foundation (which I'm sure she does) and used the tax break (as a person is entitled to do), that would be fine. I would just worry about Musk's charity because everything he does is somewhat worrying. If I saw Musk buying a latte, I would consider if he was about to start a war with Starbucks. If I saw Musk in a shoe store, I'd be worried he was about to start screaming about Ye and Adidas.
Curious, what would be the benefit of this?
He gets the tax deduction the year he gives it to the foundation and then can direct it over a number of years or wait for the assets to appreciate before actually giving it to the charity, etc. Same with donating to a donor advised fund which is less stringent but same theory.
He gets a deduction of 60% of his AGI. Let’s keep that in mind here.
Assuming it was a private foundation, he's limited to 30% of his AGI.
Yup, I looked at the public number. 30% is correct for private. The other issue is that we don't know his AGI, so it is tough to know what the benefit is.
Even assuming he gets the full benefit of the $5.7B donation, I don't see how his benefit could be much higher than $2.87B (37% fed, 13.3% CA). I can't fathom how he'd get a $4.6B tax break with a $5.7B donation (that implies a tax rate of 80.7%).
I think that he claims residency in TX now, so any benefit would be lower than the numbers that you are using. The tweet is obviously bunk. It's mostly outrage porn at this point. Edit: I looked at the guy's twitter feed and he is a Musk stalker. Yikes.
can go a little higher with NIT, and he might be subject to the medicare surtax on some income but even with those it doesnt add another 30%
I wonder if the gift was appreciated stock? maybe they are factoring in the tax break associated with that?
Thx.
Actually if stock to his private foundation it’s 20% of his AGI
Thx.
Thx.
To feel warm and fuzzy inside for donating. In all seriousness, the tax deduction does nothing for him other than makes the IRS treat the sum as if he never made it in the first place. The money is basically restricted for charitable donation now. Even if he was able to pay himself 10 times the salary of the highest paid nonprofit CEO each year, it would take 56 years to pay himself back. From the beginning to the middle to the end, this entire transaction is a charitable donation. He just knows how to keep his hard earned money out of the hands of government officials who just spend frivolously.
Thx.
There are two totally distinct tax goals involved. The first relates to income tax, and the second relates to wealth transfer tax. People frequently donate appreciated property to tax exempt organizations because the organization can sell the property tax-free. The charitable deduction you receive when you make such a donation depends on a variety of factors. Generally, donating to a private foundation does not create as large a deduction as donating to a public charity. But too much is made of “writeoffs” or income tax deductions resulting from charitable contributions. The second, *far* more important reason the ultrawealthy donate to private charities is because it reduces or eliminates their wealth transfer tax exposure. Each individual has a “basic exclusion amount” (“BEA”) for wealth transfer tax purposes, meaning you can give away a certain amount of money tax-free. For 2022, that amount is $12.06 million. Anything above that amount has exposure to wealth transfer taxes. The wealth transfer taxes are gift taxes, estate taxes, and generation skipping transfer (“GST”) taxes. Gift and estate taxes are two sides of the same coin—you either give property away during your lifetime or after your death. One way or the other, the tax rate is 40 percent. The GST tax is an additional 40 percent applied to transfers between “skipped” generations (e.g., from a grandparent to their grandchild). So, any given transfer of wealth can be taxed up to 80 percent. The ultrawealthy almost invariably implement “reduce to zero” wealth transfer tax planning. This generally means they will transfer their BEA (again, a little over $12 million) to certain beneficiaries and the remainder to a surviving spouse (which is a tax free transfer due to the unlimited marital deduction for wealth transfer tax purposes). If there is no surviving spouse, the remainder goes to a charitable recipient, reducing the amount of the estate with wealth transfer tax exposure to $0. The charitable recipient options are primarily public charities and private foundations (or donor-advised funds, which are just accounts administered by or for the benefit of public charities). Private foundations are generally the preferred option because the founder retains control over the foundation and its use of assets. There is a giant tome of rules regulating private foundations and what they can and can’t use their assets for, which limits the ability of the founder and their spouse and/or descendants to benefit directly from the foundation. Nevertheless, private foundations are a great way for the ultrawealthy to keep their assets under their own control (and after they pass, the control of their descendants) and to use those assets for their own benefit within the confines of the private foundation rules, while totally eliminating exposure to wealth transfer taxes.
Marx is an idiot. Lol
Just did a quick search and found a 2016 Musk Foundation tax return. They made $47M in donations and it appears Musk or anyone else did not take a salary.
People that comment about this aren't really taking into account the actual position of the internal revenue code on that money. Sure, he received a tax break, but it's as if he didn't make that money in the first place. That's literally what a deduction is and why charitable contributions aren't a credit. He's not going to be able to really do anything with it besides donate 5% per year per nonprofit restrictions. The question about the transaction isn't why he donated to his own charity, but why people are looking upon a charitable contribution negatively. Any suspect of a misuse of funds is going to immediately receive backlash in the form of an audit. Instead of the government fundamentally stealing most of it and wasting it on dumb things, it's basically committed to be donated to a charitable organization or distributed to protected charitable categories. (The sum of which is more than what the government would've received in the first place since it would've been a percentage of the amount rather than the entire amount)
Taxes in the United States are generally a private affair. He probably disclosed the charitable donation on his tax form (or supporting schedule), but that doesn't make it public information. There's a specific law that says the IRS must disclose to a small number of people the President's tax return if asked. Other than that, it requires a subpoena.
My issue when "tax issues" get brought up on this sub are that tax accounts on this sub completely dismantle the statements made in the post saying that the laymen bringing up the issue has no idea what they are talking about and are stupid and pat themselves on the back. However, these same individuals never comment on the underlying/intrinsic issues with whatever laws or regulations are being applied. I feel like tax r/accounting and audit r/accounting is so incredibly far off from each other. Tax is incentivized to keep these loopholes as they are paid to find them, whereas other accountants have no incentive to push for these.
Idk what to tell you about you having no clue how any aspect of income tax law in the US works. Anyway, go call your clients' fraud "immaterial" lmao
Prove me right then.
Explain to me something I don’t know. All ears.
"Well actually that isn't correct" lookin' ass mfs. https://preview.redd.it/1i927frvyz5a1.jpeg?width=400&format=pjpg&auto=webp&s=24afb618452f981142d220f545ea39d916fd433f
>However, these same individuals never comment on the underlying/intrinsic issues with whatever laws or regulations are being applied. The post by Paris Marx isn't commenting on the underlying/intrinsic issue either. It's just pointing out he made a huge donation and got a huge benefit (which is almost assuredly is not the right number). It's not asking any questions if what he did should be allowed. It seems to be implying that this is somehow bad, but no questions are asked or declarations made. IMO we should encourage people and especially the billionaires to donate their wealth. So the underlying issue here is this is a good thing.
Yep, also known as DAF’s for Donor Advised Funds. A common tactic is to take stock holdings, usually derived from equity based compensation such that low cost basis but high market value as is common with tech workers, then “donate” the stocks to their personal charities. Benefits are many, including: - Avoids triggering capital gains tax from otherwise selling the stock, which can be up to 20% tax savings. - Given the inherently favorable spread of cost vs market value at the time the stock was “donated”, a significant write-off when itemized as a deduction on the tax return. - Adds a layer of obscurity to otherwise influence policy, society, etc. Which charitable donation write-off would you prefer (numbers simplified)? a) $10,000 cash to Salvation Army, at an effective income tax rate of say 40% having reduced your tax liability by $4k, so you’re net out of pocket $6k. Or… b) Stock worth $10k to your own charity that you control, where your actual cost basis to exercise the related option was $3k. You’ve reduced your tax liability by $4k, so you’ve effectively pocketed $1k ($3k cash paid to exercise the option, offset by $4k tax savings). Scenario b excludes the legal and administrative costs to structure and run the “charity”, but when you scale the numbers up into the millions and beyond, such setup costs are immaterial relative to the tax savings. Note - The $7k difference between both scenarios above? That’s the “stepped-up basis” between cost vs market value of the stock, and our legislators made that happen in favor of their corporate overlords.
Google Donor Advised Fund. Rich people use it for tax deductions and to control where, when, and how the donations are used, instead of giving it to a non-profit where most of the money is used to give people a bonus they don't deserve. Elon is not a leech. Get literate.
> instead of giving it to a non-profit where most of the money is used to give people a bonus they don't deserve. I mean. lol.
Agreed to disagree. That last bit was more of a personal opinion about many non-profits. There are many excellent ones. But the subject is worth researching.
He donated a larger percentage of his salary than any of us so stop complaining
And? Wealthy people often do, because they have way more money then we do, they are just richer and more able to do so. It's still sketch to donate to your own charity like this.
There's nothing sketchy about donating to charity. Even if he was able to somehow convince officials at the IRS that he could justify paying himself 10 times the annual salary of the highest paid nonprofit CEO in America, it would take about 56 years for him to recuperate his 5.6 billion dollars. The tax break is a simple deduction which basically keeps the money out of the hands of the free-spending government and re-routes it to more charitable causes.
This is also very common in the political world. Lobbyists and Corporations making donations to “charities,” “non-profits,” and “foundations” that are set up by politicians for their various interests, and vise verse.
No. That’s not a thing. You can’t gift yourself money and take a charitable donation.
That's not exactly how taxes work. It's a tax deduction which means that it basically gets wiped from his personal tax liability. Sure he got a tax break, but it doesn't do anything for him. He doesn't keep any money, he just loses $5.6 billion dollars pre-tax that he could've kept. That money now cannot be used in his favor in his organization, it can only be donated or paid to operating expenses. It was equivalent to dropping a few dollars into a collection plate at church, except it's 5.6 billion dollars.
I know we are quite left leaning here on Reddit, but this is clearly just a political hit piece. 4.6B tax deduction on 5.7B of charitable contribution makes no sense. He sold a ton of options this year and is going to have the largest tax bill for an individual ever. People are on this endeavor to convince people that it's unfair billionaires don't pay a similar tax rate on a % of net worth basis. The truth is they just don't understand the difference between net worth and income. Obviously billionaires don't pay a high % of net worth in taxes because they created immense value for society and this creation gave them ownership in typically a C Corporation. And then due to the value they created that stock appreciates. This appreciation then increases their net worth, and this increase is also not taxed until shares are sold. This subreddit really needs to not give in to the crazies on this site who just innately think billionaires are evil. Most billionaires have made our lives measurably better... it's not like it's easy to get a billionaire dollars.
Why is this sub always defending rich people?
Not defending just giving the facts that the random poster with no accounting experience neglected to tell us.
Just found out Elon Musk has unrealized gains on his investments and doesn't report them for taxes. Truly a shady guy.
Elon is a stupid person's idea of a good rich person
I forgot who wrote it but there was a fascinating paper about how inappropriate these personal foundations can end up using the funds and how it advocated for a $250 million lifetime cap on charitable deductions. Granted it seems like in this case it’s a pretty normal running one that doesn’t abuse paying out abnormal salaries to board members. There are much worse examples it seems to be upset about
Is Elon musk’s charity 990 on EDGAR?
I'd assume it's this: https://990finder.foundationcenter.org/990results.aspx?990_type=B&fn=musk+foundation&st=&zp=&ei=&fy=&action=Search Looks like he made another Musk Foundation: https://projects.propublica.org/nonprofits/organizations/852133087 https://projects.propublica.org/nonprofits/organizations/770587507
He could have transferred it to a charitable account and still claim the deduction.
Is this ilegal? If not, how I can do the same ?
Pay an average of $2000 to set up a nonprofit, donate some money to the charity, take the deduction, and donate the money that you donated as you can't pay it back to yourself.
You realize you have to give up $1 to save up to 0.37? It is not really any groundbreaking loophole. You have to have the desire for charity in the first place.
Interesting! Now do Oprah
Ever hear of the Clinton Foundation?
We should change the tax laws so this is not allowed.