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by cheriot 1835 days ago
The difference is what secures the loan:

- credit card: nothing

- mortgage: the house

- car loan: the car

One could make rules about loans secured by assets with unrealized gains (with an exemption for a primary residence).

PS Credit card reward points are taxed as interest income in the US so look for a 1099 INT.
1 comments
chrismcb 1834 days ago
Why? The loan didn't get paid back magically. It isn't going to get paid back by other loans. It will eventually be paid with taxable income.
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cheriot 1834 days ago
Someone sufficiently wealthy can push off taxes until they die and their heirs can use the step up basis[1] to avoid them entirely.

There's also a huge advantage in the ability to choose when one wants to pay taxes even if they eventually do get paid. Buffet loves to talk about unrealized gains as a loan from Uncle Sam at zero percent interest.

[1] https://www.investopedia.com/terms/s/stepupinbasis.asp

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