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Originally Posted by KingSnake
I disagree with borrowing against the stock being a taxable event. Granted it is a huge benefit to defer taxation, but you'd open more problems by making loans a taxable event. It is the same as taking out a mortgage on real property.
The bigger problem are the economic sham transaction that show paper losses with no real substance.
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But we have the wealthiest people never paying taxes in their lifetime on stock that has appreciated. Gates will not pay anything on Microsofts appreciation for instance. Anyways, he would get the benefit of a long term capitals gains rate
If estate taxes go away, people would not be taxed even in death on it (and some avoid it with todays estate exemption)
Real property you live in is not taxable up to 500g anyways, and you would continue to live in it, so a little different. People are just borrowing money they pay back. With stock, it is to avoid paying taxes at all, but to cash out on its value.
Give me an example on the last one if you could. I was in public accounting for 9 years (audit, not tax) and didn't see too many of these. Felt the tax laws closed up many of these loopholes.