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You missed a couple of steps. > Then you die > The bank takes your shares to pay your debt > The IRS taxes this against your estate as income > The entire v

You missed a couple of steps. > Then you die > The bank takes your shares to pay your debt > The IRS taxes this against your estate as income > The entire value of your estate is taxed for any capital gains at the “fair market value” of all your assets at the time of your death > and then that's it.

Aerroon 5y ago
Doesn't this mean that it all still gets taxed, but if nothing goes wrong, then it's paid after you die?
- AmericanChopper 5y ago
  Yes, every single piece of it is taxed. But a lot of people really don’t want you to think it is. Apparently a couple of articles about the calendar years in which some billionaire didn’t pay very much tax did the trick on the parent commenter.
- kyteland 5y ago
  You should read about the step up in basis loophole that happens when you die. That's the biggest one I'm aware of where your estate doesn't pay taxes after death that you would have owed in life. I'm sure there are many others I'm not aware of, but this is one everyone should know about. > https://www.investopedia.com/terms/s/stepupinbasis.asp https://www.investopedia.com/terms/s/stepupinbasis.asp
rapind 5y ago
And of course it's more nuanced than that, with stuff like accelerated depreciation, preferential tax rates on investment income, charitable lead annuity trusts, etc. ad infinitum.
Spooky23 5y ago
That’s what the talk radio shills and similar right wing folks tell you. The reality is that when you have enough cash to justify, you roll your assets into a series of South Dakota trusts and that money is perpetually tax-free. Another tactic is to use Nevada and Delaware corporations to buy real property everywhere, and use that to avoid most taxation.
- AmericanChopper 5y ago
  I see. Estate tax is a right wing radio conspiracy theory…
  - Spooky23 5y ago
    For most people, there’s little to no exposure. The exotic trust structures talked about here are money laundering structures, which exist because gullible voters are duped with tales of widows losing houses and farm families losing the mythical family farm. There’s a reason why the home base for this is a state with weird banking laws where there’s more cattle than people. Mitt Romney’s (I point him out because of his fame in this regard, he’s not unique or alone) great-great-grandchildren will be living off some untaxed trust 150 years from now when we’re all dead.
    - JetSpiegel 5y ago
      Corporations are people, my friend. -- Mitt Romney Not sure if worse than his descendants living tax free hundreds of years for now, is having his image whitewashed for his "bullwark against Trump" that weirdly only manifested in the latter part of his term.
naasking 5y ago
No, they give their wealth to their family as gifts, and they have no capital gains because they were living like a royalty off of loans leveraged against their assets and so their effective gains are zero, among other tricks. It's easy for the rich to avoid taxes.
- azth 5y ago
  > living like a royalty off of loans leveraged against their assets Maybe we should ban interest instead, just like how we were told thousands of years ago. See: Islam, Judaism, and Christianity.
  - hairofadog 5y ago
    This isn’t a criticism of your comment, but I have always thought it was funny that devout practitioners of those religions seem to find ways of technically adhering to those rules while at the same time completely flouting the spirit of them. See “Heter Iska and other evasions” here https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism …or “sabbath mode” on many appliances on the market. The funny part to me is believing in an all-powerful and omnipotent god whom you can nonetheless fool with semantics and shuffling papers.
    - MomoXenosaga 5y ago
      There was a discussion about this in the Netherlands. Ultimately it was concluded that Jesus was less important than the future of the nation. And these people were 100% orthodox protestants. Quantitative easing is just too good like that.
      - azth 5y ago
        And now people cry about financial inequality. Sometimes the easy things out have long term consequences. We've living those consequences today across the globe.
    - 5y ago

Aerroon 5y ago

Doesn't this mean that it all still gets taxed, but if nothing goes wrong, then it's paid after you die?

AmericanChopper 5y ago
Yes, every single piece of it is taxed. But a lot of people really don’t want you to think it is. Apparently a couple of articles about the calendar years in which some billionaire didn’t pay very much tax did the trick on the parent commenter.
kyteland 5y ago
You should read about the step up in basis loophole that happens when you die. That's the biggest one I'm aware of where your estate doesn't pay taxes after death that you would have owed in life. I'm sure there are many others I'm not aware of, but this is one everyone should know about. > https://www.investopedia.com/terms/s/stepupinbasis.asp https://www.investopedia.com/terms/s/stepupinbasis.asp

rapind 5y ago

And of course it's more nuanced than that, with stuff like accelerated depreciation, preferential tax rates on investment income, charitable lead annuity trusts, etc. ad infinitum.

Spooky23 5y ago

That’s what the talk radio shills and similar right wing folks tell you. The reality is that when you have enough cash to justify, you roll your assets into a series of South Dakota trusts and that money is perpetually tax-free. Another tactic is to use Nevada and Delaware corporations to buy real property everywhere, and use that to avoid most taxation.

AmericanChopper 5y ago
I see. Estate tax is a right wing radio conspiracy theory…
- Spooky23 5y ago
  For most people, there’s little to no exposure. The exotic trust structures talked about here are money laundering structures, which exist because gullible voters are duped with tales of widows losing houses and farm families losing the mythical family farm. There’s a reason why the home base for this is a state with weird banking laws where there’s more cattle than people. Mitt Romney’s (I point him out because of his fame in this regard, he’s not unique or alone) great-great-grandchildren will be living off some untaxed trust 150 years from now when we’re all dead.
  - JetSpiegel 5y ago
    Corporations are people, my friend. -- Mitt Romney Not sure if worse than his descendants living tax free hundreds of years for now, is having his image whitewashed for his "bullwark against Trump" that weirdly only manifested in the latter part of his term.

naasking 5y ago

No, they give their wealth to their family as gifts, and they have no capital gains because they were living like a royalty off of loans leveraged against their assets and so their effective gains are zero, among other tricks. It's easy for the rich to avoid taxes.

azth 5y ago
> living like a royalty off of loans leveraged against their assets Maybe we should ban interest instead, just like how we were told thousands of years ago. See: Islam, Judaism, and Christianity.
- hairofadog 5y ago
  This isn’t a criticism of your comment, but I have always thought it was funny that devout practitioners of those religions seem to find ways of technically adhering to those rules while at the same time completely flouting the spirit of them. See “Heter Iska and other evasions” here https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism https://en.wikipedia.org/wiki/Loans_and_interest_in_Judaism …or “sabbath mode” on many appliances on the market. The funny part to me is believing in an all-powerful and omnipotent god whom you can nonetheless fool with semantics and shuffling papers.
  - MomoXenosaga 5y ago
    There was a discussion about this in the Netherlands. Ultimately it was concluded that Jesus was less important than the future of the nation. And these people were 100% orthodox protestants. Quantitative easing is just too good like that.
    - azth 5y ago
      And now people cry about financial inequality. Sometimes the easy things out have long term consequences. We've living those consequences today across the globe.
  - 5y ago