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by gruez 614 days ago
>This should be illegal of course... You cannot for the purposes of paying taxes say "hey, I don't actually have this money, this is unrealized gains" and then turn around (to brokerage house or anyone else) and say "hey, look I actually do have this 'money' - lemme borrow against it."

Do you think the same should apply to HELOC loans? It's basically the same thing but with your home rather than stocks.
2 comments
mindslight 613 days ago
Yes why not, in the general case. With an exception when the loan funds are being reinvested in the property itself. But in the general case where home equity from appreciation is being turned into cash that's then used for other purposes, that looks an awful lot like realizing a gain to me.

In fact this might even be advantageous to certain homeowners who live in a property as their primary residence and then convert it to wholly rental use. Before you move out, take a loan to easily realize of 250k/500k gains which you can then deduct before it's no longer your primary residence.

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bdangubic 614 days ago
Your home gains are being taxed already via ever-rising assessments on property taxes. So you are not hiding that and pretending that it is unrealized. You additionally do not pay real estate gains taxes on first 250k as well as...
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gruez 613 days ago
>Your home gains are being taxed already via ever-rising assessments on property taxes.

it's a separate tax that's on the value, not the gains. Moreover, if we're allowed to bring in other taxes as offsetting factors, do capital gains on companies get a pass because corporations pay corporate taxes as well?

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zeroonetwothree 613 days ago
From the point of view of the IRS you aren’t paying any taxes on your home’s appreciation until you sell.
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