It's a tax dodge in the sense that it renders a huge chunk of money as untaxed. It's not a dodge in the sense that any individual gains wealth through the process.

You can't save money by charitable tax deductions unless you engage in a lot of chicanery that is in the end illegal and, if caught, subject to sanction. The charitable tax deduction does not mean: "give 10,000 to charity get taxes reduced by 10,000". If you were making 100K a year and tithed 10% or $10,000 your taxes would be reduced by the amount of tax levied on that $10,000 of income. So if your tax rate was 15% you would save $1500 in taxes- but you had to let go of $10,000 to get that $1500 in savings.

I think that an individual taxpayer's ability to avoid taxes on charitable contributions is limited to 50% of gross income.

Patagonia has been and remains a very profitable business.  I seriously doubt the annual tax burden outweighed what the family stood to gain from the substantial ongoing profits & earnings they have walked away from.

There was a pretty good piece about this transaction in the N.Y. Times (I think) the other day.  They compared & contrasted the "gift" to monetary donations made in recent years by the truly super-wealthy  (Gates, Bezos, etc.) to environmental causes.  Their assessment: this deal was a substantially different animal and and not driven by tax dodge opportunities.  As I understand it, the founder/owner has donated the entire on-going, self-sustaining, profitable business.  So, rather than a one-time monetary thing, this is a kind of "living" donation that keeps on giving for a cause that is in keeping with the company mission statement.

I'm certainly neither an accountant nor a financial analyst.  Also, I'm sure there were some tax benefits for the donor.  Nevertheless, from all I've read, this appears to be a rather unique, nearly altruistic deal that will do more good, in the long run, than many one-time big-dollar, headline-grabbing gifts that probably have tax-avoidance at their heart.

Such is my limited understanding, anyhow.

Jimbo   

Read the article. Headline is a bit deceiving. The family doesn't have to pay taxes on the money they don't have because they gave it away.

Sort of like the huge tax savings I accrued by not winning the lottery. I saved millions in taxes by not winning the billion dollar powerball.

Likewise I could have won the powerball billion, given it all away and saved millions in taxes- I wouldn't be getting wealthier by reducing my taxes.

Like most everything, there is another side to this.
Not saying its not a good thing BUT he and his family are getting a BIG benefit tax wise on the deal.

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Yeah, I smiled when I read about this guy a few days ago....a company visibly helping our planet vs a company keeping record profits and doing little with it....huh....

I saw this incredible piece of news a day or so ago.  The fellow is leaving one heckuva legacy.  Plus, he's established a great model for others - with the means & high-minded purpose - to follow.  Maybe his action will inspire more such successful entrepreneurial souls out there.

He deserves our admiration.

Jimbo   

True to form.

“Truth be told, there were no good options available. So, we created our own.”
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