Billionaire investor Warren Buffett announced on Wednesday that he was halfway to his goal of distributing more than 99% of his net worth to charity, and he also detailed the tax savings he received. along the way.
Buffett explained in a letter that in 2006 he pledged to distribute all of his Berkshire Hathaway shares to charity. At the time, he owned 474,998 “A” shares and said Wednesday he had about 238,624 shares left, worth about $ 100 billion.
The legendary investor noted that philanthropy is a hot topic, which he deemed appropriate because “some or all of philanthropic contributions can generate significant tax deductions for the donor.”
“This advantage, however, is far from automatic,” Buffett explained.
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Buffett said he made 16 annual contributions to five foundations worth $ 41 billion when they were made.
He said he has a relatively low income and explained that his wealth is tied to the “taxable businesses” he owns through his Berkshire shares. One of the goals of charitable deductions is to generally reduce your taxable income.
In his specific scenario, he said the tax savings over the years amounted to 40 cents for every $ 1,000.
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Buffett, however, is known to lead a relatively frugal life despite his great wealth.
“The income I get from other assets allows me to live the way I want,” Buffett said. “My needs are simple, what made me happy at 40 makes me happy at 90.”
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Buffett acknowledged that deductions are important to many high net worth investors and said it was appropriate for lawmakers to regularly review tax policies for contributions because people can be “imaginative.”