3 ms·
Probably because 1) he donates shares (instead of cash) due to tax reasons, and 2) the receiving party needs to sell the MSFT shares to end up with cash. If he
by charlesdm 9y ago
Probably because 1) he donates shares (instead of cash) due to tax reasons, and 2) the receiving party needs to sell the MSFT shares to end up with cash.
If he donated his entire stake at once, and everyone started selling, that wouldn't be good for the share price.
- paulpauper 9y agothe stock does not have to be sold. it is used as collateral. The bank will accept $1 billion of MSFT stock in exchange for probably $1 billion cash
- dpark 9y agoThat's called a sale. Unless for some reason, Gates took a loan instead, which would be kind of a pointless way to give part of his net worth to the bank in the form of interest.
- sp332 9y agoInterest on a collateralized loan for a while might be cheaper than capital gains tax on an actual sale.
- dpark 9y agoFor some amount of time, sure. But at some point you have to pay off the loan, presumably by selling the collateral, at which point your taxes still come due and you've also paid a bunch of interest. This only makes sense if you believe the stock will increase in value enough to exceed the interest paid. If you're actually donating the stock (or the full proceeds from the sale), I'm not sure what the tax implications are anyway. You get a write off for the value of the donation, which will by necessity exceed the value being taxed. I think you actually come out ahead. But I'm no tax expert.
- charlesdm 9y agoDo charities in the US enjoy an exemption on capital gains taxes when selling stocks?