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The Initiative is an LLC and not a public charity or private foundation, so as not to limit the activities they can take part in. This will all be taxed at some
by cdcarter 11y ago
The Initiative is an LLC and not a public charity or private foundation, so as not to limit the activities they can take part in. This will all be taxed at some point (though the Initiative may further grant shares to public charities).
- cplease 11y agoYeah, I missed this the first time around. But you are not quite correct. An LLC is a pass-through entity. No doubt it will be treated as a disregarded entity for federal tax purposes. So, gifting shares to an LLC is not a taxable event. If the LLC sells shares for a non-charitable purpose (e.g. lobbying, or funding commercial ventures), then sure, that will be taxable. But if it in turn donates shares to either a private foundation or another charity, in that case, it will not be taxable, and will in fact be deductible for the Zucks. Basically, if the Zucks own the LLC, then until funds actually leave the LLC they really haven't made a donation at all.
- cdcarter 11y agoHowever, if the Initiative ever liquidates shares, regardless of what it does with them, they'll owe cap gains just M+P would have.