| >You're going to have a hard time convincing me the wealthy aren't gaming the tax system after all the reporting and leaks over the last ~40 years. Obviously every person tries to avoid taxes - you don’t have to be rich do do that - but the idea that there are magic banks that loan money and don’t mind waiting decades to get their money back is some kind of weird propaganda. >...I suspect you are simplifying what's happening quite a bit People keep saying “buy, borrow, die” as if it is really that simple - like it is that one simple trick that banks and the IRS hate. >...But wouldn't the more likely scenario be that you borrow 100m with a 10 year draw at x% interest and then at the end of the 10 years you do a stock sale (some taxes paid), pay the interest (interest is generally non-taxable) ... Your scenario is not “buy, borrow, die” as a core concept of that meme is you take advantage of the stepped-up basis upon death and the estate pays the interest. With your scenario the person imght have an interest payment of 50 million + the original 100 million, so now they have to sell enough stock to pay the 150 million and the 23-36% taxes on the gain (depending on the state they are located in - obviously different for countries other than the USA). That isn’t estate planning, that is hoping your stocks really go up and that the loan doesn’t come due in a downturn like 2008. >"oh no my art lost value!" That trick where for example, where someone would donate some painting to a museum and pay someone to say the donation is with N million, might have worked at some point in time, but that kind of thing is pretty much guaranteed to get an audit these days from what I have read and I would be very careful trying to do that. A variant of the "buy, borrow, die" which some claim is done is basically that a bank essentially becomes a minority shareholder of the estate for giving the money. Though I recall one CPA who dealt in this area replying that none of the family offices he knew would likely be interested in this approach - people like Goldman Sachs are not your friends. |