Re:Munich court tells Netflix to stop using H.265 video codi...
by jfim on Monday November 13, 2023 @05:08PM
(#38256048)
People that are wealthy enough don't really pay income tax.
For example, one loophole during the ZIRP era was that one could get a very low interest rate loan (<1% APR, so effectively lower than inflation) against appreciated securities and use that money tax free. If the wealthy person passes away and gives the appreciated securities to their heirs, their heirs have a step-up cost basis which is the market value at the time of transfer, so no taxes are ever paid on the appreciation of the stock. The heirs could then turn around and settle the loan, tax free, as their cost basis matches the market value.
For example, one loophole during the ZIRP era was that one could get a very low interest rate loan (<1% APR, so effectively lower than inflation) against appreciated securities and use that money tax free. If the wealthy person passes away and gives the appreciated securities to their heirs, their heirs have a step-up cost basis which is the market value at the time of transfer, so no taxes are ever paid on the appreciation of the stock. The heirs could then turn around and settle the loan, tax free, as their cost basis matches the market value.