You die without ever selling your stocks. Your heirs can pay off your loans by selling some of the stocks they inherit. Their cost basis for those stocks is their value at the time of inheritance. This way no capital gains tax is ever due on the stock gains made in your lifetime.

Sure but Bezos’ heirs will certainly blast past the exemption on the estate tax, which exists specifically as a backstop against this type of situation. They will pay taxes on most of what they inherit.

That’s what trusts are for! To avoid the estate tax.

At the amounts you're talking about (100s of millions of $$), virtually all of that stock would be subject to the federal estate tax, with the vast majority of it at the 40% top rate.

Those unrealized gains you're talking about are one of the main reasons the estate tax was enacted ~100yrs ago...

Yes, in practice there are more tax sidesteps via foundations, etc. But the step that wipes the capital gains liability is as described.

> Their cost basis for those stocks is their value at the time of inheritance. This way no capital gains tax is ever due on the stock gains

Are you sure that's the way it works in the US? If so that seems somewhat absurd. In Canada there's no inheritance tax but capital gains are realized on death and the cost basis resets. So your heirs inherit the assets and an associated tax bill which honestly makes perfect sense to me (at least for things like stocks).

yep.

https://taxfoundation.org/tax-basics/step-up-in-basis/

https://www.investopedia.com/ask/answers/073115/how-cost-bas...

For Bezos (and the wealthy in general), the interest rate on the loan is lower than your capital gains, so you can just keep rolling the loan forward forever.

And the interest is sometimes tax deductible

Yep. It's a great setup if you can get it (for yourself at least).