Re:Coinbase lays off around 1,100 employees
by kortilla on Tuesday June 14, 2022 @11:28PM
(#31748808)
The loans have to be paid. No matter how many times you refi, there is a massive tax bill at the end.
Re:Coinbase lays off around 1,100 employees
by matt9j on Wednesday June 15, 2022 @01:03AM
(#31749304)
This is actually not entirely true depending on how your structure your spending. In particular in the United States (the context for Coinbase's employees), the basis used to compute capital gains resets when the items are inherited when you die. So if you have enough wealth to take out loans on it until you die without ever needing to liquidate the wealth, your estate and heirs (again through some sophisticated accounting) reset the capital gains basis, and then can pay off the loans with the appreciated assets and completely avoid capital gains. ProPublica did a very detailed investigation on this in mid-2021 (https://www.propublica.org/article/the-secret-irs-files-trov...)
Re:Coinbase lays off around 1,100 employees
by quickthrower2 on Wednesday June 15, 2022 @12:04AM
(#31748996)
If I have a billion in assets and need $1M/y to live, I can live 100 years and still be at a 10% Loan-Value ratio (assuming no growth!).
With some good estate planning there is probably no tax to pay ever.
No, it doesn't. For example, if I'm super rich and take out a loan using unrealized assets as collateral, then I could be taxed on the loan amount received. There are several such strategies that either force the sale of unrealized assets or tax other portions of the transactions when those unrealized assets are used as collateral.
What is bizarre is that somehow people making less than $200,000 a year can be heavily taxed while if you're a multi-millionaire or billionaire, suddenly things become so drastically difficult that you couldn't possibly be taxed on anything you do with your monopoly money.
The example you gave is, quite frankly, pointless in the context of discussing billionaires. Discussing real estate assets far less than $2 million is completely irrelevant to a discussion about people with net worth exceeding hundreds of millions of dollars, if not tens of billions of dollars.
> It is not wealth until you have it.
If that's true, then stop allowing people to turn it into wealth, which they do all the time.