3 ms·
In many of the cases of those loans, they are structured to be payable only after the death of the person receiving the loans. And at that moment the cost basis
by larkost 5y ago
In many of the cases of those loans, they are structured to be payable only after the death of the person receiving the loans. And at that moment the cost basis for all of the investments goes to the price at the end of the day of death... bypassing all of the capital gains taxes. That is the real problem there.
I do completely agree that treating capital gains more favorably than earned income is just crazy (even though I personally benefit from it).
- lend000 5y agoDo you have a source for this? I just struggle to believe that lenders would make loans like that on a large scale, without some major caveats.
- TheCoelacanth 5y agoI don't think the loans actually need to be structured like that to achieve the same effect. You can just pay off the loan by taking out another loan. There would be some risk that you couldn't get another loan, but if you're only borrowing 10% of your net worth, it's probably an extremely small risk.
- mewpmewp2 5y agoRelated to the topic, what is interesting, is Switzerland home loans. When usually countries have max periods of 20-30 years, Switzerland has periods of 50-100 years, so you very well would not pay it back before end of your life.