Elon Musk’s $10.5 bn SpaceX giveaway, Anthropic’s 5% share fund: How will gifts work? Who pays tax? Scenarios explained
Elon Musk has promised to give one SpaceX share to every child in the US next year, a pledge worth an estimated $10.5 billion. The announcement comes a day after artificial intelligence company Anthropic proposed setting aside 5% of its equity for a public benefit fund. Both plans aim to share corporate wealth, but questions remain over eligibility, distribution, governance and tax implications.
Elon Musk said on X on Monday that he plans to give one SpaceX share to every child in the US next year, describing the giveaway as “the first of many”. With each share valued at about $146, the plan could be worth roughly $10.5 billion, based on an estimated 72 million US children under the age of 18.
However, Musk has not explained how eligible children would be identified, how the shares would be transferred or when families could expect to receive them, ABC News reported. It also remains unclear how the giveaway would be funded and whether any conditions would apply to the shares.
Quick answers to key questions
•5 QUESTIONS
1
How much could Elon Musk’s SpaceX share giveaway be worth?⌵At about $146 per share and an estimated 72 million US children, the proposed gifts could be worth roughly $10.5 billion. Other estimates in the reports put the total at around $10 billion to $10.7 billion.
2
How would Elon Musk distribute SpaceX shares to children?⌵Reports say Musk plans to distribute the shares through Trump Accounts, but he has not disclosed the detailed structure. The accounts can receive equities, and funds generally remain invested until recipients reach adulthood.
3
Who pays tax on gifted SpaceX shares?⌵For a direct gift, the giver generally pays any gift tax; a share valued at about $146 is below the stated annual gift-tax limit of around $19,000 per recipient. Children generally do not pay income tax just for receiving shares, but selling them at a profit may create a tax bill.
4
Can children sell the SpaceX shares they receive?⌵The rules for selling gifted shares have not been established. Shares given to young children may need to be held in adult-managed accounts, and reported restrictions raise questions about when recipients could sell.
5
How will Anthropic’s 5% public benefit fund distribute its shares?⌵Anthropic says the fund could donate to established nonprofits or distribute money directly to specific groups. It has not yet named the fund’s overseers or provided detailed governance and tax arrangements.
At $146.03 a share, the proposed gifts would be worth roughly $10.5 billion.
An August filing with the US Securities and Exchange Commission showed Elon Musk held about 4.8 billion SpaceX shares. Including unvested awards and stock options, his beneficial ownership rises to 6.4 billion shares, or 48.4% of the company. Giving away 72 million shares would reduce his direct holding by about 1.5%.
Musk has an estimated net worth of $904 billion.
Anthropic said on Sunday it would allocate 5% of its shares to a new Anthropic Public Benefit Fund, a wholly owned entity intended to support the public interest.
The allocation could increase as the company grows in value. For every 50% increase above a specified baseline, the board could approve an additional 2% of shares for the fund, subject to shareholder approval.
The fund could make large donations to established non-profit organisations or distribute money directly to specific groups. Anthropic has yet to name its overseers or disclose detailed governance arrangements, saying more information would follow in the coming months.
The announcement comes as the company prepares for a possible stock market debut as early as November. Elon Musk responded on X, arguing that shares should go directly to the public.
Musk has not disclosed his distribution mechanism. Three possible routes highlight the tax and practical issues involved.
US tax rules generally require the person giving a gift to pay any gift tax. Since each proposed SpaceX share is worth about $146, far below the annual gift tax limit of around $19,000 per recipient, Musk is unlikely to face a gift tax bill for each share. However, the scale and structure of the giveaway could affect reporting requirements.
Children would not normally pay income tax simply for receiving the shares. But if they later sell them, they could face a tax bill on the profit, particularly if Musk originally bought the shares at a much lower price. Shares given to young children may also need to be held in accounts managed by adults until the children are old enough to control them. Any investment income earned along the way could also be subject to special US tax rules for children, known as the kiddie tax.
One option is to give the shares through Trump Accounts, a savings scheme for children. In July, SpaceX president Gwynne Shotwell and her husband pledged one share each for more than two million children, with a focus on lower-income youngsters aged 11 to 17.
US Treasury guidance may also offer a way to donate shares through special savings accounts for children. Under the reported rules, the shares would generally have to stay in the accounts for five years. Musk has not said whether he intends to use this route.
Musk could use a charitable organisation or foundation to manage the distribution. Donations to qualifying charities can offer tax advantages, including potential deductions, depending on the recipient’s legal status and the structure of the transfer.
Similar questions apply to Anthropic’s fund. Its tax treatment will depend on its legal structure and whether it qualifies for tax-exempt status.
The tax implications of Anthropic’s plan will depend on who receives the money and how the fund distributes it. Donations to registered charities would generally be tax-free for the recipients, although any tax benefit for Anthropic would depend on how the fund is set up.
If the fund gives money directly to individuals, recipients could have to pay tax, depending on how the payments are classified. Anthropic has yet to explain who will benefit or how the money will be distributed.
The fund could also hold on to the shares after Anthropic goes public and sell them later. Any profit could attract capital gains tax unless the fund qualifies for an exemption. Setting aside 5% of the company’s equity could also reduce existing shareholders’ ownership stakes, making it important to clarify how the plan will be approved and managed.
Both proposals face significant practical hurdles.
Musk has not clarified whether his giveaway would cover only US citizens or all children living in the country, how eligibility would be verified, or how shares would reach roughly 72 million recipients.
The timing of any sale is also uncertain. Reported SpaceX post-listing restrictions, including a 366-day lock-up for insiders, raise questions about whether and when recipients could sell their shares. The rules applicable to gifted shares have not been established.
Anthropic, meanwhile, has yet to disclose who will oversee its fund, its legal status or its detailed tax arrangements.
Until both companies provide further details, the value of their proposed initiatives is easier to estimate than their practical and tax consequences.
This article is for general information only and does not constitute tax or legal advice.
Sayantani Biswas is an assistant editor at Livemint with seven years of experience covering geopolitics, foreign policy, international relations and global power dynamics. She reports on Indian and international politics, including elections worldwide, and specialises in historically grounded analysis of contemporary conflicts and state decisions. She joined Mint in 2021, after covering politics at publications including The Telegraph. <br> She holds an MPhil in Comparative Literature from Jadavpur University (2019), with a specialisation in postcolonial Latin American literature. Her research examined economic nationalism through Eduardo Galeano’s Open Veins of Latin America. She also writes on political language, cultural memory and the long shadows of conflict. <br> Biswas grew up in Durgapur, an industrial town in West Bengal shaped by migration, which drew families from across India to the Durgapur Steel Plant. As the only child in a joint family, she spent years listening—almost obsessively—to her grandparents’ testimonies of struggle, fear and loss as they fled Bangladesh during the Partition of 1947. This formative exposure to lived historical memory later converged with her training in Comparative Literature, equipping her to analyse socio-economic structures and their reverberations. <br> Outside the newsroom, she gravitates towards cultural history and critical theory, returning often to texts such as Paulo Freire’s Pedagogy of the Oppressed. As a journalist, she is committed to accuracy, intellectual rigour and fairness, and believes political reporting demands not only clarity and speed, but historical depth, contextual precision, and a disciplined resistance to spectacle.
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