Who died and left the US $7B?

Re:Who died and left the US $7B? by efsavage on Wednesday October 09, 2024 @12:47PM (#41789969)

There is definitely an obvious fix, just have collateralization be considered realization. You're welcome to have as much money on paper as you want, but if you want to post $Xm in stock against a loan, you need to pay taxes on it first.

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Re:Who died and left the US $7B? by hluska on Wednesday October 09, 2024 @01:01PM (#41790119)

What happens if the value of the underlying asset depreciates?

Here’s a hypothetical:

- I own $100 of stock in Company A.

- The First International Bank of efsavage decides to accept that $100 in stock as collateral on a loan. So I pay taxes assuming a value of $100.

- When I dispose of the stock, it is only worth $80.

Will that be a retroactive credit, meaning that I will have to amend my tax return in the year that I collateralized those assets? Would it be a forward tax credit, meaning that I could apply that credit to future years?

I worry about this both from a bookkeeping point of view (since this is potentially a lot of credits) but also worry the ways it could be manipulated.

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Re:Who died and left the US $7B? by a_c_s on Wednesday October 09, 2024 @01:44PM (#41790618)

Why would you earn a credit?

You created a tax event and paid taxes on it and you got a loan for x% of $100.

If you sell the stock at $80 you'd pay no taxes on the appreciation (-$20). No credits, investing is risky.

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Re:Who died and left the US $7B? by hnaccount_rng on Wednesday October 09, 2024 @04:41PM (#41792397)

Why not just treat it as any other loss for tax reasons? If I understand this correctly, then the current state is basically: If you take losses you can use those to nullify a future gain. Just do that.

And.. the bookkeeping thing is really solvable. That's kind of what banks are for

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