An LLC is by default a pass-through entity for tax purposes. This means that unless a special election is made, all the financial activity passes through the LLC to the owners. Therefore, when the LLC makes money, its members will recognize the gain and pay tax on it. When the LLC loses money, the loss will flow through to the members. When it makes a charitable donation, its members will receive the benefit of the charitable tax deduction. Accordingly, when stock is transferred to the LLC, Mr. Zuckerberg and Ms. Chan have simply moved an asset from one pocket to the other and they receive no tax benefits.
What are the Advantages over Traditional Private Foundation? Read details here
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