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A comment on Musk announces funding secured for Twitter buy. Parent comment

Re:Musk announces funding secured for Twitter buy by toomuchtodo on Thursday April 21, 2022 @11:13AM (#31110505)
Tax the proceeds at loan origination (1099-whatever filed by whomever is providing the cash based on pledged assets). How you pay the loan back if the collateral declines in value is your problem (or the bank’s problem, depending on the amount in question).

High level, it closes a financial engineering loophole (buy, borrow, die [1]). The taxable event is when you get liquid, and a loan is liquidity. The tax code requires a patch, that’s all.

[1] https://youtu.be/8pBPZMUcsh0

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Re:Musk announces funding secured for Twitter buy by jcheng on Thursday April 21, 2022 @11:56AM (#31111158)
Would taxing the loan reset the cost basis, then? Or are you suggesting taxing the same gains twice (or more than twice if someone repeatedly takes out and pays back a loan against the same assets)?

I agree buy, borrow, die is a problem but the “weird” feature of tax law that makes that possible is the step up in basis. (Getting rid of that has its own challenges I’m sure.)

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Re:Musk announces funding secured for Twitter buy by bombcar on Thursday April 21, 2022 @12:08PM (#31111326)
Given how fast heirs squander their wealth, it may not be worth the government fighting it too much, especially as the side-effects cause all sorts of howling (grandpa dies, dad inherits farm, has to sell it to pay the tax bill).
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Re:Musk announces funding secured for Twitter buy by toomuchtodo on Thursday April 21, 2022 @12:46PM (#31111846)
Shooting from the hip, sure, the broker could record this as a cost basis adjustment and report that attribute along with the rest of the form reported to the IRS.
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Re:Musk announces funding secured for Twitter buy by alecbz on Thursday April 21, 2022 @01:33PM (#31112567)
Oh, sure, I thought GP meant the opposite (make it easier for non-rich people to take loans on assets) but this makes more sense.
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Re:Musk announces funding secured for Twitter buy by ragebol on Thursday April 21, 2022 @01:46PM (#31112759)
Guess that is implied but not really what I meant. Poor people don't have much assets so it wouldn't do much.

My issue with the whole "Elon has to pay taxes" thing is that there are loads of people (fans?) fighting over why he shouldn't have to. It's the richest dude in the world, he really doesn't need defending for everyday people.

I also like the cool stuff he does, don't like the non-cool stuff he does, as I do with a lot of people really

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