The loan itself is orthogonal. Using them as collateral would just reset basis to the value appraised with taxes due on the difference between that and the ori

The loan itself is orthogonal. Using them as collateral would just reset basis to the value appraised with taxes due on the difference between that and the original basis, just like any other realization event. From a tax perspective it'd be like if you sold and immediately rebought the stock or whatever.