Alex Bruno
According to a filing with the US Securities and Exchange Commission (SEC) on Monday, Tesla CEO Elon Musk gave a total of 5,044,000 shares in the world’s most valuable carmaker to a charity between Nov. 19 and Nov. 29 last year.
Based on the closing prices of Tesla shares on the five days that he gave the stock, the contribution was valued $5.74 billion. The name of the charity was not disclosed in the application.
The gift came after the billionaire sold $16.4 billion worth of shares in Tesla after polling Twitter followers about selling 10% of his stock in the electric vehicle manufacturer in early November.
He announced on Twitter that he would owe more than $11 billion in taxes in 2021 as a result of exercising stock options that are supposed to expire this year.
He also sneered at Democrats Bernie Sanders and Elizabeth Warren, both of whom have urged for higher taxes on the rich.
According to analysts, giving Tesla stock to charity would provide a tax advantage since shares are given to charity are not subject to capital gains tax, as they would be if sold.
“His tax gain would be enormous,” said Bob Lord, a tax policy expert at the Institute for Policy Studies.
“Depending on whether he could use the deduction against his California income, he would save between 40% and 50% of the $5.7 billion in taxes, and he would escape the gains tax he would have to pay if he sold the stock.”
Musk may have given the shares through middlemen like as “donor-advised funds,” rather than directly to charity organizations, according to Lord.
Tesla did not respond to a request for comment right away.
During the Model S Beta Event held at the Tesla plant in Fremont, California on October 1, 2011, Tesla Motors CEO Elon Musk talks next to the company’s newest Model S. Stephen Lam/File Photo/REUTERS
According to statistics from the Chronicle of Philanthropy, Musk is America’s second-largest giver, after only Bill Gates and Melinda French Gates.
So far, Musk’s public charity has lagged behind that of other billionaires. According to business magazine Forbes, Musk and Amazon.com Inc founder Jeff Bezos had contributed less than 1% of their total assets, while Warren Buffett and George Soros had given away more than 20% by early September.
According to its website, Musk is the president of the Musk Foundation, which provides grants for the “development of safe artificial intelligence to benefit mankind,” among other causes.
Musk and the foundation announced a $100 million reward last year to anybody who could develop a system that might help remove carbon from the environment.
He said last year that he will donate $20 million to schools in Cameron County, Texas, which is home to a Space X rocket launch site, and $10 million to Brownsville.
Musk has also toyed with the idea of philanthropic ambitions that are more grandiose.
“If (the United Nations Global Food Programme) can demonstrate… precisely how $6 billion would cure world hunger, I will sell Tesla shares right now and do it,” he declared on Twitter last year.
He was responding to a request for help from David Beasley, the World Food Programme’s executive director. He asked Twitter followers for “ways to contribute money that genuinely make a difference (much tougher than it sounds)” in January of last year.
