I created this spreadsheet to show that the difference is pretty trivial IFF you ever cash out (<2% over 10 years). However, a lot of people: 1) never plan to

I created this spreadsheet to show that the difference is pretty trivial IFF you ever cash out (<2% over 10 years). However, a lot of people: 1) never plan to cash out. 2) know that tax rates are fickle and plan for a day when there will be extremely low tax rates - just like for companies to "repatriate" their profits - and hope that they can in the future realize with little-to-no profits (although, I doubt capital gains tax rates will go much lower, and might actually go MUCH higher). Anyway - the difference before you realize is >13% over 10 years (and the higher the rate of return is, the bigger the difference - it's >17% with a 10% per year return, which is historically average for the extremely wealthy according to Piketty). Here's the sheet: https://docs.google.com/spreadsheets/d/1dZ6h0s2lZBp0fM6Z2w1KOiRrlUaFc3tyIYdPPMfsMpk/edit?usp=sharing https://docs.google.com/spreadsheets/d/1dZ6h0s2lZBp0fM6Z2w1K... This strategy isn't really popular unless you have a networth of greater >$20M. It's particularly attractive, because you get $40k in untaxed capital gains per year - which is roughly what you need to pay the interest on your "borrowed" / "pretend unrealized" capital gains. And, the added benefit is, the interest IS TAX DEDUCTIBLE!