[arrosenberg]

When I bought my home I had to sell $XXX,XXX of stock to make the down payment. If Jeff Bezos wants to buy the same house, he would use a line of credit from the bank, collateralized by his Amazon shares (or whatever source of wealth) and pay with that. I paid 15% in long-term capital gains, he pays 0%. Under my plan, he would pay 15% LTCG for collateralizing his stock,. If I had to pay it, then it's entirely fair and reasonable that we expect him to pay his fair share too.

[RhysU]

You could have done the same thing with a margin-enabled brokerage account, e.g. Interactive Brokers or Fidelity.

It's not particularly hard. Just have enough collateral to not get margin called. And, like the margin interest rate better than the tax hit. Shop around for rates. Notice, you don't have to pay the entire down payment this way.

If you have amassed 6 figures of stock and are buying a house, you're qualified to educate yourself on these topics. It's usually worth reading up anytime you incur that sizable a taxable event.

I am not saying this is a great idea, BTW. Just, it's an idea within many people's reach.

[arrosenberg]

If it's a bad idea, it's a bad faith argument - why would you suggest it? The tax laws shouldn't favor the gross accumulation of wealth, nor the starvation of the treasury, so the laws need to change to force the rich to pay their fair share.

[fn-mote]

> If it's a bad idea, it's a bad faith argument

I believe the GP is just cautioning rando HN readers that they should not rush out and make their down payment in the manner described, as opposed to liquidating some of their stock options for "real cash" like the GGP had to do.

They are just explaining a reasonable method that the (above) average HN reader could use to be in the same situation as Bezos of having a 0% tax on their down payment.

In the US, there's a pretty massive exemption (well, deferral) for capital gains tax on the sale of a primary residence, so once you have one home to work with, the down payment is (kind of?) tax-free anyway.

[arrosenberg]

They definitely shouldn't. It's absurd to suggest that because a middle-class homebuyer can get a margin loan through iBroker means that we should let the richest people in history dodge taxes in this way. If no one would actually do that, then it really doesn't matter that they technically can. The obvious solution is to take away the privilege from the wealthy and make them abide the same rules as the rest of us.

[RhysU]

> They definitely shouldn't.

Never give absolute financial advice to anyone who's situation you don't fully understand.

[arrosenberg]

Nah, I’m pretty comfortable that 99.99999% of people should not take a margin loan to buy a house. Close enough for me.

[triceratops]

Bezos gets a much better margin rate than you or I would ever get on IBKR. And IBKR doesn't margin call, they straight up auto liquidate. Bezos's lender would never do that to him.

[NewJazz]

And withdrawals from margin accounts should cause taxable events too. Honestly it is up to the industry to justify and propose a workable tax scheme that makes margin accounts feasible. Withdrawals triggering taxable events seems fair to me, though.