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> Another issue is that the tax savings felt by the donors is tied to the original contribution's valuation and not the valuation at the time the money is used.

> Another issue is that the tax savings felt by the donors is tied to the original contribution's valuation and not the valuation at the time the money is used. So in the case of GoPro's Nicholas Woodman, he got a tax break based on $500 mil, but the shares have dropped around 93% so if they're used for charity now it's like he only donated a fraction of that amount. Sure, but the reverse is true as well - the contribution could increase in value, which benefits the charity. And if that happens, he doesn't get to claim the difference as a deduction. Furthermore, he gets the tax deduction based on $500 million because that's the amount he's giving up at the moment he makes the (irrevocable) decision to divert the funds to charity. (The alternative is for him to liquidate and hold onto the $500 million himself; he's getting a tax deduction for not doing that).

Woberto 8y ago
In this case investors saw his donation as a sign of lack of confidence in the company, which indicates that he chose to make the donation when he thought he could get the biggest tax break from it. I think it'd be fair for donors to get a tax break according to how much the stock is worth when it's given to charity.
- chimeracoder 8y ago
  > I think it'd be fair for donors to get a tax break according to how much the stock is worth when it's given to charity. In the most common scenario, that would mean people could receive deductions on a larger tax basis than the value they actually donated. If they waited long enough, they could even receive a tax break that was greater than 100% of the amount they donated.
- downandout 8y ago
  In this case investors saw his donation as a sign of lack of confidence in the company An admittedly brief review of the news articles about this event seem to contradict that. The author of this article interpreted the drop that way in order to better make their case, because...well...they have no case. Below I have listed a few articles from the front page of Google results for this subject. Not a single article that I could find mentions investor worries that the donation was driven by the CEO's lack of confidence in the company. Rather, investors were upset because JP Morgan allowed these shares to be released from a lockup agreement with virtually no advance notice to shareholders. They were worried that the shares could potentially be sold by the charity almost immediately, which would have flooded the market with insider shares far earlier than investors expected. https://www.inc.com/associated-press/gopro-shares-fall-as-ceo-donates-shares-to-charity.html https://www.inc.com/associated-press/gopro-shares-fall-as-ce... https://money.cnn.com/2014/10/02/investing/gopro-charity-shares/index.html https://money.cnn.com/2014/10/02/investing/gopro-charity-sha... http://fortune.com/2014/10/02/gopro-shares-woodman-charity-lock-up-period/ http://fortune.com/2014/10/02/gopro-shares-woodman-charity-l... https://www.wsj.com/articles/gopro-ceos-foundation-doesnt-intend-to-sell-shares-1412281879 https://www.wsj.com/articles/gopro-ceos-foundation-doesnt-in...
  - Woberto 8y ago
    Thanks for this, it's a good reminder that I should also look deeper into claims!

Woberto 8y ago

In this case investors saw his donation as a sign of lack of confidence in the company, which indicates that he chose to make the donation when he thought he could get the biggest tax break from it. I think it'd be fair for donors to get a tax break according to how much the stock is worth when it's given to charity.

chimeracoder 8y ago
> I think it'd be fair for donors to get a tax break according to how much the stock is worth when it's given to charity. In the most common scenario, that would mean people could receive deductions on a larger tax basis than the value they actually donated. If they waited long enough, they could even receive a tax break that was greater than 100% of the amount they donated.
downandout 8y ago
In this case investors saw his donation as a sign of lack of confidence in the company An admittedly brief review of the news articles about this event seem to contradict that. The author of this article interpreted the drop that way in order to better make their case, because...well...they have no case. Below I have listed a few articles from the front page of Google results for this subject. Not a single article that I could find mentions investor worries that the donation was driven by the CEO's lack of confidence in the company. Rather, investors were upset because JP Morgan allowed these shares to be released from a lockup agreement with virtually no advance notice to shareholders. They were worried that the shares could potentially be sold by the charity almost immediately, which would have flooded the market with insider shares far earlier than investors expected. https://www.inc.com/associated-press/gopro-shares-fall-as-ceo-donates-shares-to-charity.html https://www.inc.com/associated-press/gopro-shares-fall-as-ce... https://money.cnn.com/2014/10/02/investing/gopro-charity-shares/index.html https://money.cnn.com/2014/10/02/investing/gopro-charity-sha... http://fortune.com/2014/10/02/gopro-shares-woodman-charity-lock-up-period/ http://fortune.com/2014/10/02/gopro-shares-woodman-charity-l... https://www.wsj.com/articles/gopro-ceos-foundation-doesnt-intend-to-sell-shares-1412281879 https://www.wsj.com/articles/gopro-ceos-foundation-doesnt-in...
- Woberto 8y ago
  Thanks for this, it's a good reminder that I should also look deeper into claims!