Elon Musk donates USD1.95bn worth Tesla shares: SEC filing

Tesla CEO, Elon Musk, donated his electric car [EV] manufacturing firm Tesla Inc's shares worth USD1.95 billion [or Rs195 crore] to a charity earlier last year, a filing with the United States Securities and Exchange Commission (SEC) revealed on Tuesday, February 14. The SpaceX and Twitter chief executive had previously sold off an estimated USD11.6 million worth of shares between August and December 2022 as he was in the process of finalising a purchase bid for microblogging site Twitter.

The security filing did not name the recipient of the donation funds. The shares were sold even as Tesla's owner Musk made a commitment not to sell any more stocks of the electric vehicle company for at least for 18 to 24 months. 

Tesla filed a Form 8-K with the SEC proposing a 3-for-1 stock split that was decided at the car manufacturer's annual meeting on August 4. On August 24, the shareholders agreed to split the stocks following the lead of online retail giant Amazon owned by Tesla's rival boss Jeff Bezos. 

Credit: US Treasury/ Securities and Exchange

Musk eyeing financial benefits via charitable contributions

Musk sold several chunks of Tesla shares when he was in the process of acquiring Twitter. Just days after he finalised the deal worth USD44bn, Musk had sold nearly USD3.95bn worth of Tesla shares, the US regulatory filing shows. This was in addition to the USD5.74 worth of stocks that he sold in 2021. Musk currently owns around 13% of Tesla. Business experts speculate that Musk may be eyeing financial benefits as funds paid towards the donations in the United States are exempted from capital gains tax.

Under US laws, businesses can receive tax benefits through charitable income if they give away in donations their assets such as bonds, stocks, and real estate. Charitable income reduces three types of federal taxation - income, capital gains, and estate taxes. Any charitable deductions can be claimed later as itemised deductions and can be subsequently added back to the income under the AMT. Tech billionaire Musk, in 2012, joined the Giving Pledge Charity Organization and vowed that he would donate at least half of his fortune to the NGO. World's richest person was worth USD2 billion at the time. Twitter's CEO also established the Musk Foundation to give away grants for the "development of safe artificial intelligence to benefit humanity".