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by andrewla
849 days ago
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I only just learned about this in Matt Levine's newsletter [1], and assuming they don't get regulated out of existence, it seems almost too good to be true. The effective tax-discounted rate of return on a 5.6% interest-bearing account is really only 3.5% because it's ordinary income (paying taxes of .37 * 5.6). But as long-term gains it becomes 4.3% (paying taxes of .238 * 5.6). And while it is compounding you pay no taxes at all. [1] https://www.bloomberg.com/opinion/articles/2024-02-22/put-th... |
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