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Given that the nonprofit is managed by his two sons, the decision might spare the family a large tax payment. The charity was founded by the deceased co-founder of Subway restaurants and announced that it will receive a 50% interest in the multibillion dollar sandwich brand.
According to a story published in The Wall Street Journal last month, privately owned business Subway is considering a sale that some insiders say might bring up to $10 billion.
Nuclear scientist Peter Buck, who together with Fred DeLuca, at 17 years old, co-founded Subway in Bridgeport, Connecticut in 1965, passed away in 2021 at the age of 90.
The Peter and Carmen Lucia Buck Foundation (PCLB), which supports a range of causes like environmental preservation, education, health care, and journalism, was established in 1999 by Buck and his wife.
The co-founder of Subway designated his two sons, Christopher and William Buck, to the charity’s board of directors, according to a copy of Buck’s will that Forbes was able to get. According to Forbes, Peter Buck’s two sons and Ben Benoit, the charity’s senior financial officer, are the executors of his will.
According to the terms of his will, Buck’s personal belongings, including his jewelry, vehicles, and art, stamp, and coin collections, would be shared equally between his two sons.
More significantly, the will specifies that PLCB will receive 50% of the Subway sandwich chain.
Accordingly, Buck’s donation to the cause might be valued up to $5 billion.
The charity’s executive director, Carrie Schindele, said in a statement: “This gift will enable the foundation to significantly expand its philanthropic endeavors and impact many more lives, especially our work to create educational opportunities for all students, work Dr. Buck cared so deeply about.
But if and when Subway is sold, the decision may help the family by protecting the sons from a future tax obligation.
According to Miles Brooks, the director of tax strategy at Austin, Texas-based cryptocurrency platform CoinLedger, “the co-founder of Subway giving his firm to a nonprofit controlled by his kids is a solid approach to optimize tax savings.”
According to Brooks, the government offers a number of tax incentives, such as “cutting and erasing asset tax liabilities and decreasing the taxable value of the inheritance,” to help people donate money to charity.
The wealthy creator of the outdoor clothing firm Patagonia, Yvon Chouinard, declared in September that he would be donating his family’s ownership interest in the $1.2 billion business to a trust that will utilize its earnings to combat climate change.
Voting shares of the corporation were handed to the Patagonia Purpose Trust, while non-voting shares were donated to the charity Holdfast Collective, which supports environmental causes.
According to a Bloomberg News estimate, Chouinard probably spared himself from having to pay more than $700 million in capital gains taxes had he sold the business.
David Green, the 80-year-old founder and CEO of the arts and crafts retailer Hobby Lobby, said in late October that he had “chosen God” and given up control of his multibillion-dollar retail business.
Green stated in a Fox News opinion piece that he intends to give the firm to a trust rather than his children. As of Wednesday, Forbes pegged his net worth at $14.8 billion.
When questioned about a possible sale last month, Subway said in a statement, “As a privately held company, we don’t comment on ownership structure and business intentions.”
“We are committed to advancing the brand via our transformative path in order to support our franchisees’ success and profitability.”
What do you think of that Subway’s founder donation gesture? Please let us know in the comments.