In an update posted to his Facebook page Thursday, Facebook CEO Mark Zuckerberg explained why he and his wife, Priscilla Chan, established a Limited Liability Corporation (LLC) to administer the donation of 99% of his Facebook shares announced earlier this week.
In the post, Zuckerberg explained that setting up an LLC, as opposed to a traditional foundation, allows for more flexible use of the funds. He also disputed the notion that structure is a way for him to avoid taxes.
"By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively," Zuckerberg wrote. "In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC."
Zuckerberg also jumped into the comments on the post, rebutting some critical remarks.
"Just a way to get your billions tax free..... Yeah well done," wrote one user.
"This isn't correct and the link you shared has a bunch of false information. We will pay tax just like everyone else when the Chan Zuckerberg Initiative sells our Facebook shares. Please don't spread false information!," Zuckerberg responded.
On a lighter note, someone wrote: " Congratulation. put some new pics of ur baby." To which Zuckerberg responded "soon."
Here's the full post:
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