The most valuable automaker’s CEO, Elon Musk donated 5,044,00 million Tesla shared in November to an unnamed charity. The details are revealed from an SEC filing. The donation is worth $5.74 billion based on the closing share value on the five days in November the donation took place.
The filings did not reveal which organization received the charity money. The donation came as the billionaire sold $16.4 billion worth of shares after polling Twitter users about offloading 10% of his stake in the electric-car maker in early November. He said on Twitter that he would pay more than $11 billion in taxes in 2021 due to his exercise of stock options set to expire this year. He also traded barbs with politicians Bernie Sanders and Elizabeth Warren who called on wealthy people to pay more taxes. Analysts have said there would be a tax benefit for Musk potentially gifting Tesla stock, since shares donated to charity are not subject to capital gains tax, as they would be if sold.
An associate fellow at the Institute for Policy Studies who studies tax policy, Bob Lord said, “His tax benefit would be huge. He’d save between 40% and 50% of the $5.7 billion in tax, depending on whether he could take the deduction against his California income and he’d avoid the gains tax he would have to pay if he sold the stock.” Lord added that Musk might have contributed the stock to intermediaries such as “donor-advised funds,” not outright to charitable groups.
Bonafide gift
While Reuters states the money as a donation, other media channels state that as a “gift”. This could be possible considering that it could be an advisable option from experts. The SEC filing specifies that the transaction was a “bonafide gift.” The filing reads, “Represent a bona fide gift of the Issuer’s common stock by the Reporting Person to charity.”
Several people point out Elon Musk’s tweet in November about solving world hunger.
If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.
— Elon Musk (@elonmusk) October 31, 2021
Musk did say he’d be willing to help, but only if he was told exactly how his $6-billion donation would solve world hunger. However, we didn’t hear a whole lot more about the situation following those tweet exchanges, and Musk never announced that he donated. Moreover, he said he’d “sell Tesla stock right now,” though in this case, he didn’t actually sell the stock for cash, rather he gave away the shares as a free gift. . The CEO helped with the water crisis in Flint, Michigan, as well as the power outages in Puerto Rico, without personal “advertising” that he was providing financial assistance. This is not the first time Elon Musk is donating.
