Tesla chief executive Elon Musk donated a total of 5,044,000 shares in the world’s most valuable automaker to a charity from November 19 to 29 last year, its filing with the U.S. Securities and Exchange Commission (SEC) showed on Monday. The donation was worth US$5.74 billion, based on the closing prices of Tesla shares on the five days that he donated the stock. The filing did not disclose the name of the charity.
The donation came as the billionaire sold US$16.4 billion worth of shares after polling Twitter users about offloading 10 per cent of his stake in the electric-car maker in early November. He said on Twitter that he would pay more than US$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.
“His tax benefit would be huge,” said Bob Lord, an associate fellow at the Institute for Policy Studies who studies tax policy. “He’d save between 40 per cent and 50 per cent of the US$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.”
Tesla was not immediately available for comment.
The donation ranks Musk as America’s second-biggest donor after Bill Gates and Melinda French Gates last year, data from the Chronicle of Philanthropy shows.
Btw, critical feedback is always super appreciated, as well as ways to donate money that really make a difference (way harder than it seems)
— Elon Musk (@elonmusk) January 8, 2021
Musk’s public philanthropy gestures have so far trailed other billionaires. Musk and Amazon.com founder Jeff Bezos have donated less than 1 per cent of their net worth, whereas Warren Buffett and George Soros had given away more than 20 per cent by early September, according to business magazine Forbes.
Musk is president of the Musk Foundation, offering grants for the “development of safe artificial intelligence to benefit humanity” among other causes, according to its website.
Last year, Musk and the foundation offered US$100 million prizes to those who can come up with a technology to help remove carbon from the atmosphere.
Keyword: Musk donated over US$5.7 billion in Tesla shares to charity