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Charitable
Limited Liability Company

The CLLC is the “Charitable” alternative to Private Foundations. The Charitable Limited Liability Company forms a sophisticated tax minimization strategy of choice for High Income Earners. In fact, it is the same tool used by Mark Zuckerberg and his wife Dr. Priscilla Chan. Learn what it can do for you TODAY!

High Income Strategy

Perfect for those with:

  • More than $400,000 Annual Income
  • or Tax Liability over $100,000
  • Palma Financial Tax Minimization Planning

Benefits

With the CLLC you can reduce or eliminate up to: 60% of Adjustable Gross Income.

Why pay more in income taxes when you can save with Palma Financial today!

Better Choice

Avoid many requirements and restrictions of Private Foundations.
  • Form 990-PF not required
  • No 5% annual distribution requirement
  • No Jeopardy Investment Rule

Client Case

$660,000 Tax Reduction

High Income client received their first tax refund in over a decade with Palma Financial Services, Inc.

With a $1.1M funded CLLC, we helped achieve a $660,000 tax reduction and a tax refund of $350,000 for 2018.

Our client now has access to the $1.1M funds at a minimal interest rate which provides a huge leveraging and wealth building opportunity.

In addition, a charitable legacy was started.

Miguel Palma
Mark Zuckerberg’s Philanthropy Uses L.L.C. for More Control

How Mark Zuckerberg benefited from his $45 billion gift of 99% of his Facebook stock to charity:

Many philanthropists, making a large contribution such as this, will set up their own private foundation to actually receive the gift.

For example, Bill and Melinda Gates donated shares of Microsoft to the Bill and Melinda Gates Foundation which is now the largest foundation in the United States. What Mark Zuckerberg and his wife Dr. Priscilla Chan are doing is transferring Facebook shares to a Delaware limited liability company (LLC) named the Chan Zuckerberg Initiative. This is not a new technique used to engage in philanthropic activities. Previously, Laurene Powell Jobs, Steve Jobs’ widow, created the Emerson Collective, also an LLC.

How does the Charitable LLC work?

The Chan Zuckerberg Initiative is not a 501(c)(3) tax-exempt entity. It will be treated as a pass-through entity for income tax purposes so that income, expenses and other tax attributes will flow through to the members (the Zuckerbergs) who will report that income on their individual income tax return. There may be little taxable income to pass out to the Zuckerbergs because Facebook stock does not currently pay dividends.

Because it is not a private foundation, the Zuckerbergs will not receive a charitable contribution deduction when they contribute their stock to the LLC. But this may not matter to them because without Facebook paying dividends, their income is most likely not high enough to take advantage of the charitable deduction. If they had made the contribution to a private foundation, the charitable contribution that they could take each year would be limited to 20% of their adjusted gross income. This could be carried over for five years, but they would never be able to utilize the full tax deduction of $45 billion.

If the Chan Zuckerberg Initiative does decide to make contributions to charity, as a pass-through entity, the LLC would pass those deductions out to the Zuckerbergs. Instead of giving cash to the charities, the LLC would most likely give appreciated Facebook stock to the charity which would produce a charitable deduction equal to the fair market value of the stock at the date of the gift. This would not trigger a capital gain recognition at the LLC level, and the Zuckerbergs would therefore avoid paying capital gains tax on the shares gifted.

Charitable LLC The Better Choice!

Form 990-PF Return of Private Foundation
not required!

Charitable LLC The Better Choice!

Five percent annual distribution requirement
not required!

Charitable LLC The Better Choice!

Excess Business Holdings Rule
not applicable!

Charitable LLC The Better Choice!

Jeopardy Investment Rule
not applicable!

Charitable LLC The Better Choice!

Founder's Self-Dealing Rules
not applicable!

Charitable LLC The Better Choice!

Political and Lobbying Expenditures
allowable!
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(925) 307 - 5454
(408) 295 - 4963

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