|
|
|
|
|
|
by Terr_
28 days ago
|
|
|
> The idea is that taking a secured loan out using an asset as collateral would be a taxable event for that asset. Doesn't that puts valuations in the hands of people who could conspire to manipulate them, creating false data points? For example, suppose you bought something for $25 a long time ago, and it has, very unofficially, appreciated to ~$100. I could lend you $100, and the contract will say that I'm only asking for it to be partially secured with collateral, which will be, oh that "$25" asset which obviously hasn't appreciated in value at all. Poof, no gains tax. I think the real issue here has to do with dodges in the Estate Tax, which is the endgame that these delaying games are meant to reach. |
|
|
I certainly agree with the estate / inheritance tax (the main issue is “resetting” the value to market at point of inheritance)
But as for the valuation problem I think that can only stretch so far. If you put up a million shares of $TechFirm as collateral for a loan to buy a yacht, it’s hard to claim they aren’t worth what the NYSE listed them as. If instead you put up 250,000 shares as partial collateral the bank has to put the missing collateral on its balance sheet (else some one is committing fraud)
The thing is it’s common. We on HN know all about “borrow till you die”, that Trump got Mar-a-lago valued at a billion dollars. The problem is not banks doing favours for valued clients, it’s so common and normalised that we don’t notice.