Musk, the "richest man", donated $6 billion (about 38 billion yuan) in one go.
A U.S. stock exchange report shows that between November 19 and 29, 2021, Musk donated 5.04 million shares of Tesla stock to an unnamed charity, which is expected to exempt him from $2.8 billion in taxes.
But the huge sum of money was not donated to the United Nations World Food Programme (WFP) as expected.
Some foreign media believe that Musk may donate shares to the "Musk Fund" he set up.
The $941 million fund, more than half of which is known to be donated, is of interest to Musk.
This speculation is not unfounded, and Musk has mastered it in terms of "reasonable tax avoidance".
In 2021, Tesla pays 0 yuan in taxes. Musk himself sold 7 California homes and paid $2.5 billion less in taxes just by moving.
Then through Twitter " governing stocks", donating when the stock price is high, paying taxes and exchanging options when the stock price is low. He also avoids taxes by holding virtual currencies.
In 2016, musk donated 1 million Tesla shares to his own fund in order to give less to his ex-wife at the time of divorce.
Musk's thirty-six tax avoidances are not limited to this...
Is the $6 billion, which disappeared this time, just the tip of the iceberg of the "tax-avoidance" empire of the Rich America? As the outside world accuses of "fake charity, real tax avoidance"?
The Battle of "Forced Donations": Musk shells UN officials
The story of Musk, a small expert in tax avoidance, also begins on the day he became the world's richest man.
In October 2021, Musk suffered two major events in a row.
First, SpaceX's market value exceeded the 100 billion mark.
Second, Tesla's stock price has soared all the way, breaking through $1110.
Subsequently, Musk's value soared to $241.4 billion, becoming the world's richest man.
Musk, who learned that he was "the richest man", immediately said that he was not interested in money. Two tweets in a row said "it's weird" and "let's get to work."
Although he ostensibly assumed that "I'm not interested in money," Musk secretly sold 7 California properties and announced that he and Tesla would jointly "move" to Texas, a move that is expected to save $2.5 billion in Texas, which does not levy personal income taxes.
Subsequently, the richest man, Musk, was targeted by the United Nations.
On November 1, 2021, WFP official Beasley named Musk for "forced donations" on Twitter. He said he offered a "once-in-a-lifetime" opportunity for the new richest man, who is currently facing "fuel and funding shortages, no payroll, and no ability to mobilize food trucks."
Musk only needs to donate a mere $6 billion, and with the proceeds of one day's stock he holds, he can save 42 million lives around the world.
Musk replied that if WFP could come up with a specific plan, he would sell Tesla stock and donate it to them now. But the bookkeeping must be made public so that the public has a clear idea of how the money was spent.
On November 15, WFP announced the details of the plan for the use of the funds. The aid program said it would spend about half of its money to provide food directly to the most vulnerable in specific areas affected by famine. The remaining funds will be used to set up a voucher program that allows people to buy food locally and improve the local food economy.
Beasley went on to shout at Musk, "This crisis is urgent, unprecedented, but avoidable. ”
Three months later, Tesla released a SEC filing showing that from November 19 to 29, Musk donated 5.044 million tesla shares, worth about $5.7 billion.
Many parties speculated that this move was in response to the "forced donation" of the WFP.
But the document did not mention the charity's name, and WFP said it had not received the payment. In response to this news, Tesla said it would not comment.
The New York Times believes that the donation may be intended to evade taxes, and it does not rule out that Musk is donating to a foundation controlled by himself.
U.S. IRS filings show that starting in the 2019 tax year, taxpayers can deduct up to 60 percent of adjusted gross income from charitable donations, and musk funds are eligible for tax exemption.
Fund Doubts: Fake Charity, Real Tax Avoidance?
Founded in 2002 by Musk and his brother Kimball, the Musk Foundation is a private, nonprofit organization. Kimbal · Musk served as secretary, treasurer and director of the board of directors with a start-up capital of $2.5 million.
Open the fund's official website and you will find that the fund has no donation link, no contact information, and only a few lines of concise text introduction.
U.S. law stipulates that charitable foundations only need to donate 5% of their assets each year, including expenses for charity and salaries for employees, and the gains obtained are not subject to taxation.
IRS records show that donations from musk funds are serving its business empire. Media investigations found that the Musk Foundation often donates to his family and affiliates, but these actions are "within the scope of charitable norms."
The latest documents show that from January to June 2020, the Musk Fund issued a total of $24 million in assets, and the size of the fund reached $941 million.
In 2020, the Musk Fund donated $60,000 to the Ad Astra School. The school is an experimental private school co-founded by SpaceX's Los Angeles-area campus and is located in Tesla's headquarters in Austin, Texas. It is reported that the children of Musk and SpaceX employees have all studied at this school.
In addition, Musk Fund also donated 50 million yuan to two advisory funds under pioneer and Fidelity Investment Group. In 2018, Fidelity Investment Group led the investment, injecting $500 million into SpaceX.
There are also some small amounts of money flowing that are noteworthy.
In 2012, the fund donated $8,750 to neurosurgery researchers at UCLA, at a time when Musk's Neuralink company was launching a brain-computer interface research project.
Musk also donated $5,000 to right-wing organizations such as the Cato Institute. The group aims to "restore the American traditions of small government, individual freedom, a market economy, and peace." Donated to the conservative National Taxpayers Union Foundation, it is an organization formed by conservative taxpayers in the United States.
In addition, the Musk Foundation donated $10,000 to the Los Angeles Police Foundation and $25,000 to the Los Angeles Rose Foundation to ease traffic congestion.
Some media statistics say that more than half of the known donations are related to Musk's interests.
In addition, Musk donated at least $257 million to the DAF Fund, most of which took the form of Tesla stock. DAF fund funds can deduct taxes, stocks and real estate, etc., and before they are officially used for charitable projects, they can increase their value and preserve their value in accordance with market-oriented investment and financial management methods, and carry out venture capital and impact investment.
DAF donations allow donors to remain "anonymous" without disclosing the details of the grant.
Commentators pointed out that this is the usual means of "tax avoidance" of American tech billionaires, that is, to create a non-profit fund to donate to themselves. Through the donation of stocks and other means, reasonable transfer of assets, and strive for personal income tax exemption.
Section 501(c) of the U.S. Tax Code provides that nonprofit funds may accept anonymous donations with no limit on how long the funds can be used. The person said that non-profit funds have become "a new source of Wall Street profits", often used when the rich have "large windfall profits" in their accounts, such as IPOs, sharp rises in stock prices and divorces.
In 2016, Musk donated 1.2 million shares of Tesla stock worth $254,610 to the Tesla Foundation at the time. The timing of the donation allowed Musk to avoid taxes and avoid ceding shares to his second wife, who divorced in the spring of 2016.
The "Tax Evasion" Fog: The Truth About Card Point Donations
The essence of Musk's tax avoidance lies in the accurate "card point".
First, he chose to donate in November 2021, when Tesla's stock price exceeded $1100, 20% higher than the current stock price.
The sell-off was concentrated in December, when Tesla shares fell as much as more than 24 percent. When donating is high, selling is low, one is high and one is low, and Academician Musk is indeed not in vain.
Between 2019 and 2021, Tesla's stock price rose by more than 1500%, which means that Musk faces a 23.8% capital income tax on selling shares. By arbitrage the difference between the capital income tax rate and the ordinary income tax rate, Musk could be exempted from nearly $1 billion in taxes.
In addition, Musk, who does not receive wages as long as the option, has another abacus.
Analysts say that when Musk exercises his options, he pays taxes by selling shares. He also received lower exercise costs due to his sell-off behavior, which caused the stock price to fall.
After a set of high-sell-low-to-low maneuvers, Musk now holds 2 million more shares than he started selling in November last year, making at least $1 billion in profits.
As of now, Musk owns 172.6 million shares of Tesla, becoming Tesla's largest personal shareholder with 17% of the shares.
After "escaping" huge taxes, Musk sold his house and left California for the first time, allowing him to avoid paying an additional 13.3% personal income tax, saving $2.4 billion.
Property records show that Musk himself provided personal loans to buyers of at least five homes, facilitating the completion of the transaction.
In addition to donations, Musk is also very good at borrowing money to "avoid taxes".
According to statistics, a number of investment banks lent Musk a total of $515 million and mortgaged shares to borrow billions of dollars. Some legal people analyzed that "although the money has interest, it is far cheaper than the tax rate."
Pay taxes and search, but use other people's taxes, unambiguously.
Musk, who started with electric vehicles, originally relied on government subsidies to get into position.
To date, Tesla and SpaceX have received billions of dollars in incentive funding to build factories in Nevada, New York and Texas.
"Musk might not have become a billionaire had it not been for generous tax incentives from the federal government and jurisdictions like California and encouraging people to buy his cars," one commentator noted. ”
In order to clarify the "tax avoidance" rumors, Musk began to shake the air.
The Massachusetts senator questioned the support for the "rich man's tax": "If someone could have died of irony, she would have died a long time ago." ”
In the interview, he talked about paying taxes: "I don't have a salary to talk about paying taxes, do I give my shares to the government?" He also said his personal assets were not "secret" and that no tax avoidance was taken.
He noted, "I'm going to pay more than $11 billion in taxes this year." Just open your eyes for 2 seconds to know that I'm going to pay more taxes this year than any american in history. ”