• jjjalljs@ttrpg.networkEnglish
    11·
    2 months ago

    They pay very low interest on the loans, and they only pay taxes on the stock if they sell (and realize the gains). If they die, their heirs don’t pay taxes because of the step up basis rule.

      • jjjalljs@ttrpg.networkEnglish
        3·
        2 months ago
        • Have a few million in stock and other assets
        • get a loan against these assets at a very low rate
        • do literally anything with that money that has a higher return than your interest rate
        • never pay income or capital gains taxes

        I’m sure it gets more complicated than that. “Buy borrow die” is a common strategy

          • jjjalljs@ttrpg.networkEnglish
            2·
            2 months ago

            I’m not rich enough to know the details. You can probably find answers online since it’s not like a secret. I think if the amounts are large enough, the rates can be lower so the bank still makes money. Also the collateral is worth more than a house, I think. Usually. More liquid.