IRS records reveal how the wealthiest avoid income tax

Re:IRS records reveal how the wealthiest avoid income tax by kristjansson on Tuesday June 08, 2021 @09:44AM (#27435117)

That’s one of those things that seems too dumb to possibly be true, but it looks like it is? An estate can sell stocks in probate with cost basis set to date of death, not purchase? Sort of makes sense, the heirs would get the stepped-up basis, the stocks, and the debt if the executor didn’t net them out in probate.

I guess it’s a bet you’ll be dead before the interest outweighs the potential tax, or volatility spikes? Betting on your own death seems to macabre, and too tempting too the fates.

[ Parent | on HN ]

Re:IRS records reveal how the wealthiest avoid income tax by Chamix on Tuesday June 08, 2021 @05:44PM (#27441300)

You pay off the interest with the 40k of equities you can liquidate in 0% capital gains bracket, per year.

And yes, a bet that interest rates will remain below effective tax beyond that.

[ Parent | on HN ]

Re:IRS records reveal how the wealthiest avoid income tax by papercrane on Tuesday June 08, 2021 @10:12AM (#27435445)

For ultra-high net worth individuals it's a pretty safe strategy. Typically a low volatility equity that doesn't pay dividends is used and only a small percentage of their portfolio is used.

Over the long run it tends to work in their favour as well, since it's very likely that the increase in the portfolio value will outpace the interest paid.

[ Parent | on HN ]

Re:IRS records reveal how the wealthiest avoid income tax by kristjansson on Tuesday June 08, 2021 @10:41AM (#27435799)

> increase in the portfolio value will outpace the interest paid

Ah, right. Caught me twice on my fixed-pie thinking :)

[ Parent | on HN ]