If you have $150m of Amazon stock and you want to buy a mansion, you have to either sell the stock and pay taxes, or you can take out a loan and use the Amazon

If you have $150m of Amazon stock and you want to buy a mansion, you have to either sell the stock and pay taxes, or you can take out a loan and use the Amazon stock as collateral to get super favorable terms. A $50k loan won't buy you your mansion, nor will it help you avoid any taxes when you do try to realize some of the value of your Amazon stock. The point is that if you and a bank jointly agree the asset has appreciated in value, and you give the bank a claim on that asset in order to be approved for a big loan, this collateralization activity should be treated as a taxable event in the same way that a sale is, because both activities are different ways of realizing the gains.