Chan Zuckerberg Initiative highlights benefits of LLC structure

• DOI: http://doi.org/10.1002/nba.30152
• Published date: 01 February 2016
• Date: 01 February 2016

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(See LLC on page 2)

IRA charitable rollover

permanently extended

As part of the appropriations deal worked out

by Congress and the White House late December,

some key tax deductions have been extended and/

or made permanent, including a major charitable

giving provision long favored by the nonprot

sector.

As part of H.R. 2029 — also known as the

Protecting Americans from Tax Hikes Act of 2015

— the regulations concerning qualied charitable

distributions from individual retirement accounts

have been permanently extended. Under these pro-

visions, taxpayers who are over age 70 ½ can make

a charitable donation of up to $100,000 directly

from an IRA, without incurring any tax burden.

The donation is not claimed as a tax deduction, but

it is not taxed as income either, as a normal IRA

withdrawal would be. Further, the distribution

counts towards the taxpayer’s Required Minimum

Distribution obligations, which kick in once an

individual reaches the age of 70 ½.

While the provisions had lapsed at the end of

2014, the new legislation makes the Qualified

Charitable Distribution rules permanent at their

existing levels and thresholds. For more information

on the tax regulations governing charitable dona-

tions, visit 1.usa.gov/1Pl5A9f. ■

Chan Zuckerberg Initiative

highlights benets of LLC structure

there was something below-board about it, as if it

were a tax dodge. In reality, according to nonprot

tax specialist Jeffrey Tenenbaum, it’s just a sign of

the evolving nature of philanthropy.

“Not everyone’s definition of charity is the

same,” Tenenbaum told Nonprot Business Advi-

sor. “It’s expanding, and furthering a charitable

purpose is no longer conned to donating to a

The news of Mark Zuckerberg and his wife, Dr.

Priscilla Chan, pledging the lion’s share of their

wealth to charity made waves recently in the philan-

thropic sector, but not just because of the couple’s

generosity. Instead of donating 99 percent of their

Facebook shares to launch a private foundation or

similar nonprot entity, the pair elected to estab-

lish a limited liability company—formally known

as the Chan Zuckerberg Initiative—to which the

couple will donate the stock in waves over the

course of their lives. Establishing it as a for-prot

entity turned heads because of the relative lack of

transparency required as compared to a traditional

nonprofit organizational structure. And, since

LLCs have much greater freedom in what they can

do with their money—they can invest in for-prot

companies and engage heavily in lobbying and

other political-oriented activities, for example—

some suspected the move might mean fewer dollars

going to formal nonprots. Still others wondered if

Vol. 317 February 2016