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How is that any different than paying with a credit card or using reward points? Those aren't taxable or treated like income so why should loans and mortgages b

• cheriot 5y ago
  The difference is what secures the loan: - credit card: nothing - mortgage: the house - car loan: the car One could make rules about loans secured by assets with unrealized gains (with an exemption for a primary residence). PS Credit card reward points are taxed as interest income in the US so look for a 1099 INT.
  • chrismcb 5y ago
    Why? The loan didn't get paid back magically. It isn't going to get paid back by other loans. It will eventually be paid with taxable income.
    • cheriot 5y ago
      Someone sufficiently wealthy can push off taxes until they die and their heirs can use the step up basis[1] to avoid them entirely. There's also a huge advantage in the ability to choose when one wants to pay taxes even if they eventually do get paid. Buffet loves to talk about unrealized gains as a loan from Uncle Sam at zero percent interest. [1] https://www.investopedia.com/terms/s/stepupinbasis.asp https://www.investopedia.com/terms/s/stepupinbasis.asp