CEO will boost operating budget of team tasked with evaluating code and product to avert discrimination.
3 min
Alphabet Inc.’s Google plans to double the size of its team studying artificial-intelligence ethics in the coming years, as the company looks to strengthen a group that has had its credibility challenged by research controversies and personnel defections.
Vice President of Engineering Marian Croak said at The Wall Street Journal’s Future of Everything Festival that the hires will increase the size of the responsible AI team that she leads to 200 researchers. Additionally, she said that Alphabet Chief Executive Sundar Pichai has committed to boost the operating budget of a team tasked with evaluating code and product to avert harm, discrimination and other problems with AI.
“Being responsible in the way that you develop and deploy AI technology is fundamental to the good of the business,” Ms. Croak said. “It severely damages the brand if things aren’t done in an ethical way.”
Google announced in February that Ms. Croak would lead the AI ethics group after it fired the division’s co-head, Margaret Mitchell, for allegedly sharing internal documents with people outside the company. Ms. Mitchell’s exit followed criticism of Google’s suppression of research last year by a prominent member of the team, Timnit Gebru, who says she was fired because of studies critical of the company’s approach to AI. Mr. Pichai pledged an investigation into the circumstances around Ms. Gebru’s departure and said he would seek to restore trust.
In addition to straining the existing team, those personnel changes have frayed Google’s relationship with external groups focused on AI such as Black in AI and Queer in AI, which released a joint statement Monday criticizing Google for setting a “dangerous precedent for what type of research, advocacy, and retaliation is permissible in our community.” The statement was earlier covered by Wired.
Ms. Croak called those exits a tragedy and said she agreed to fill the position because she thought she could help provide some stability in what has been a distressing time. A Princeton University graduate, she has a doctorate in social psychology and quantitative analysis and said she plans to bring her user-focused approach to engineering and concern about societal issues to the role.
“I thought, maybe, I could make a difference and carry on the work and have a larger impact,” Ms. Croak said.
Health will be one area of focus for the group, she said. The AI team recently assisted in the development of an algorithm that can detect abnormal heart rhythms by scanning fingertips on an Android phone. During its development, she said the ethics team helped determine that darker-skinned people had more variabilities and errors in testings, which had to be addressed before the product’s release.
Ms. Croak is one of very few senior Black executives at Google, where Black women account for 1.2% of the workforce. She has served as chair of Google’s Black Leadership Advisory Group and has been active in calling for Silicon Valley companies to improve their diversity.
“They’re disappointing numbers and I think that’s true for so many companies in Silicon Valley,” Ms. Croak said of the percentage of Black employees in Google’s workforce. “Fortunately, in the last year or so, we’ve made a more concerted effort in attracting Black talent, but those numbers are pretty dismal.”
She said that Google has been more proactive in providing mentorship to young Black staffers and said that it would take changing the culture across Silicon Valley to improve opportunities for people of color in tech.
“Sometimes I think it’s the mind-set where you’re very competitive and individualistic in your pursuits in the workplace and that sometimes can foster, not racism, but at least exclusion,” Ms. Croak said.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: May 11, 2021.
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Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.
4 min
Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.
This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.
Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.
Here are three strategies useful for functional families.
It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.
But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.
If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.
To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.
In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.
If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.
Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.
The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.
Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.
However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.
These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.
But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.
Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.
The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.
Sellner doesn’t worry about his children using the funds for another purpose.
“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.
Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.
Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.
Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”
A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.
Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.
Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.
Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.
