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What about the point about taking out loans to avoid paying income tax, since money from a loan isn't income. Isn't that one of the major points? I don't get h
by socialist_coder 5y ago
What about the point about taking out loans to avoid paying income tax, since money from a loan isn't income. Isn't that one of the major points?
I don't get how do they pay the loan off though, without paying taxes on the money used to pay off the loan. How does that work? Any loan I take out, I'd have to get income and then use my income to pay off the loan.
- nmfisher 5y agoI assume if you have a loan of $100,000 secured against an asset worth $1 million that appreciates 10% each year, you can basically continue rolling over the loan. As long as the asset value doesn’t drop, you never have to actually repay the loan with your own cash (at least, not until you die or you sell the asset).
- socialist_coder 5y agoAhh, makes sense. So they are never paying back the loan with earned income. Thank you!