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You left out the portion where you get the money to pay the principal and interest. Either you actually sell some of that stock, or you work a job to get that
by eadmund 5y ago
You left out the portion where you get the money to pay the principal and interest. Either you actually sell some of that stock, or you work a job to get that money. Either way you that income will be taxed.
- thefreeman 5y agoI'm no expert but in other parts of the thread people are saying that interest is tax deductible. So you sell just enough stock to cover the interest and the capital gains are not taxed because they are offset by the interest deduction.
- bombcar 5y agoYou still have to pay down principal at some point. In this case explicitly I suspect it has more to do with the uncertainty of the deal going through AND not wanting to incur the tax penalty ALONG with the share penalty (liquidating $30 billion in TSLA would affect its price for sure). If you sold the shares to raise the cash, paid the tax, and then the deal didn't go through and bought the shares back, you'd be out the tax (with a stepped-up cost basis to be sure).
- HWR_14 5y agoOr continually roll the debt over, borrowing more money and more money. Then, when you die, your estate can sell the assets to cover the debt, but that avoids taxes.