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But, if the non-profit gives all its assets to the new legal entity, shouldn't the new legal entity be taxed heavily? The gift tax rate goes up to 40% in the US
by duchenne 2y ago
But, if the non-profit gives all its assets to the new legal entity, shouldn't the new legal entity be taxed heavily? The gift tax rate goes up to 40% in the US. And 40% of the value of openAI is huge.
- SkyPuncher 2y agoYou don't need to sell/give the assets away to allow the for-profit to use them. You sign an exclusive, non-revocable licensing agreement. Ownership of the original IP remains 100% with the original startup. Now, this only works if the non-profit's board is on-board.
- baking 2y agoA non-profit can't give away its assets to a private entity, but it can exchange its assets for fair value, in this case, equity in the for-profit.