| > LOL, I assumed you asked a question to learn something. If you're not interested in learning, please continue believing that everyone gets the same tax system. Otherwise keep reading. > the stepped up basis gets hit with the inheritance tax. There's no federal inheritance tax. Only some states have it. You're thinking of the estate tax. If you read the link I posted: https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26... it has a fairly detailed explanation of how it's a completely different ballgame above a net worth of $300m. Grantor trusts allow sidestepping estate tax and... > The loan and the interest payments "The loan" otherwise known as "income" because that's what it really was. Income that would normally have been derived by selling assets. Obviously it has to be paid back. No one said it's free money. Only that it's (largely) tax-free money. The interest payments are lower than the income tax would've been on the same amount of income. > and dont forget the inheritance tax. You mean estate tax. Explained above. > Yes, they can borrow money, die, the inheritors pay off the loan with the stocks, and then pay estate tax. Not in the same way, and not nearly as effectively. If there are specific inaccuracies with https://www.reddit.com/r/BuyBorrowDieExplained/comments/1f26... I'm open to learning. |
They're the same as far as this discussion is concerned, as the amount that the beneficiary gets is (roughly) the same.
> "The loan" otherwise known as "income" because that's what it really was
Borrowed money is not "income" in any sense of the word. When I was on summer vacation, I decided to take a class in accounting. One of the most productive uses of my time. I recommend it. P.S. if your business tries to classify borrowed money as "income", that's called fraud.
> If you read the link I posted
I rely on my CPA for tax advice, not the internet, nor do I care much for misusing accounting terms. I've read too many articles that confuse income with revenue, wealth with income, and so on.