They didn't announce plans to sell immediately and given the timeframe, I'd imagine that selling/transferring those shares will be done in the most tax-advantaged way possible.
Besides taxes, selling 44.5 billion worth of shares would affect the share value negatively. They will probably use some kind of derivative contract to get funds for the non-profit.
He's not selling the shares. He said they "will give 99% of our Facebook shares." If he sold appreciated stock and donated the proceeds, he'd still have to pay tax on the capital gains, and could only deduct the amount of the actual donation, which would be smaller after tax.
By donating stock directly, he still gets to deduct the full value of the stock without paying any tax, and the charity (or more likely, private foundation) gets to keep the full value without paying any tax. And it could take as long as it wanted to liquidate the stock and get the best price.
> the charity (or more likely, private foundation) gets to keep the full value without paying any tax. And it could take as long as it wanted to liquidate the stock and get the best price.
Yes, and the foundation will likely not liquidate the stock, but use the proceeds of some kind of swap contract.
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).
Yeah, 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.
