5 ms·

How do you know you have over 100m in assets? One never really knows the worth of something until it's sold. (i.e. try selling a used car. there's what you th

How do you know you have over 100m in assets? One never really knows the worth of something until it's sold. (i.e. try selling a used car. there's what you think it's worth and what you get...) And once the asset is sold, that's a taxable event.

sealeck 2y ago
> How do you know you have over 100m in assets? If your bank determines that assets you post for collateral are worth 100mn or more, that's a pretty good indication.
- rv3909i 2y ago
  So if I don't apply for a loan, I don't get assessed, which means I don't pay taxes? Anyway, the system is not that simple and bank assessment would be trivial to game. People do it now even without taxes on the line...
  - sealeck 2y ago
    It's one of many things that can give you some idea what an asset is worth.
- sbsudbdjd 2y ago
  That's an estimate to enable business to go on based what the bank is willing to risk. For the proposal to work you would need an estimate good to within less a percent. Or lawsuits galore.
- llm_trw 2y ago
  Ah yes banks. The people responsible for the 2008 crash.
swader999 2y ago
Hunter Biden art comes to mind.
- sbsudbdjd 2y ago
  Great example. The art is very valuable, financially, because people are willing to pay for it. However, absent the market clearing the asset, its value is impossible to objectively evaluate. Even if we had an objective function to evaluate art the basis of evaluation is incorrect - the artwork is valuable as an instrument of government corruption So m, if we can't even agree on the reason why Hunter's artwork is worthwhile, how can we even possibly evaluate it?
  - swader999 2y ago
    Yes, it's impossible and it's true for every asset that's not a commodity. It's why unrealized gains tax is DOA. I guess it's not impossible, we do it for property tax on real estate. There are real costs though.
    - sbsudbdjd 2y ago
      massive costs. Turns out people resent having their school board guess what their taxes ought to be.
kjkjadksj 2y ago
Easy. Share price x number of shares.
- sbsudbdjd 2y ago
  Few things are easy. Some problems with your proposal: 1. Assumes the asset in question is publicly traded. 2. Assumes the publicly traded asset has a non trivial amount of trade volume 3. Assumes asset price is relatively stable, moving in a narrow band along a clear trend-line 4. Assumes you have defined the price from the stock information (last trade before close. Daily average, etc) 5. Assumes holder's position is small enough not to affect stock price were they to sell. And stocks are the easiest to do this with! Look at the Trump vs NY court case for the value of his house in FL. Unlike the valuation imposed by government fiat, the valuation was agreed to freely by the parties. The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal that the judge is either incompetent on the matter or has a personal bias and should anyway have recused himself.
  - zimpenfish 2y ago
    > the value of his house in FL Are we talking about Mar-a-Lago here? > the valuation was agreed to freely by the parties Which valuation is that? The one from Lawrence Moens?
    - sbsudbdjd 2y ago
      I do believe it was the Mar a Lago, yes. Trump's valuation was eye watering, I still can't believe it, but the market players agreed to it. The banks agreed to the valuation and under no coercion agreed to lend money with it as collateral. Trump pays off that loan and the banks are made whole. By contrast my school board telling me my house is worth 600 k instead of 400 k scares the shit out of me. I can't agree to it and my only recourse are the courts. The school board has lawyers on staff so it costs them nothing if I sue.
  - anigbrowl 2y ago
    The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal This is just wrong. The very low valuation was not proposed by the NY court, but by the Palm Beach County tax appraiser. This is because the property is deeded for use as a social club rather than a private residence (a condition of sale when Trump purchased it iirc, and one which affects future disposal of the property) and as a commercial entity the value is appraised as a multiple of business income.
throwaway2037 2y ago
You raise a good point. I found this page from the Norway tax authority. (In a previous post, I noted that Norway had had a wealth tax for a long time. About 1%.) > When calculating wealth tax, you must include any assets that you own at the end of the year. These assets must generally be valued at what the asset is worth on the open market. However, an exception is made in the case of housing, and a lower value, known as the tax value, must be used when calculating wealth tax. Ref: https://www.skatteetaten.no/en/rates/tax-value-of-housing/ https://www.skatteetaten.no/en/rates/tax-value-of-housing/ Two things stand-out to me: (1) "assets must generally be valued at what the asset is worth on the open market". I guess there will be GAAP accounting rules about how to value less liquid assets. Tradable securities are easy to value; other things, like artwork are less easy to value. In the case of a car, an accountant could reasonably use an online used car marketplace to find a value. (The US has something called the Kelley Blue Book.) (2) "an exception is made in the case of housing". It sounds like there is a totally different set of rules for taxing housing (land+building).

sealeck 2y ago

> How do you know you have over 100m in assets? If your bank determines that assets you post for collateral are worth 100mn or more, that's a pretty good indication.

rv3909i 2y ago
So if I don't apply for a loan, I don't get assessed, which means I don't pay taxes? Anyway, the system is not that simple and bank assessment would be trivial to game. People do it now even without taxes on the line...
- sealeck 2y ago
  It's one of many things that can give you some idea what an asset is worth.
sbsudbdjd 2y ago
That's an estimate to enable business to go on based what the bank is willing to risk. For the proposal to work you would need an estimate good to within less a percent. Or lawsuits galore.
llm_trw 2y ago
Ah yes banks. The people responsible for the 2008 crash.

swader999 2y ago

Hunter Biden art comes to mind.

sbsudbdjd 2y ago
Great example. The art is very valuable, financially, because people are willing to pay for it. However, absent the market clearing the asset, its value is impossible to objectively evaluate. Even if we had an objective function to evaluate art the basis of evaluation is incorrect - the artwork is valuable as an instrument of government corruption So m, if we can't even agree on the reason why Hunter's artwork is worthwhile, how can we even possibly evaluate it?
- swader999 2y ago
  Yes, it's impossible and it's true for every asset that's not a commodity. It's why unrealized gains tax is DOA. I guess it's not impossible, we do it for property tax on real estate. There are real costs though.
  - sbsudbdjd 2y ago
    massive costs. Turns out people resent having their school board guess what their taxes ought to be.

kjkjadksj 2y ago

Easy. Share price x number of shares.

sbsudbdjd 2y ago
Few things are easy. Some problems with your proposal: 1. Assumes the asset in question is publicly traded. 2. Assumes the publicly traded asset has a non trivial amount of trade volume 3. Assumes asset price is relatively stable, moving in a narrow band along a clear trend-line 4. Assumes you have defined the price from the stock information (last trade before close. Daily average, etc) 5. Assumes holder's position is small enough not to affect stock price were they to sell. And stocks are the easiest to do this with! Look at the Trump vs NY court case for the value of his house in FL. Unlike the valuation imposed by government fiat, the valuation was agreed to freely by the parties. The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal that the judge is either incompetent on the matter or has a personal bias and should anyway have recused himself.
- zimpenfish 2y ago
  > the value of his house in FL Are we talking about Mar-a-Lago here? > the valuation was agreed to freely by the parties Which valuation is that? The one from Lawrence Moens?
  - sbsudbdjd 2y ago
    I do believe it was the Mar a Lago, yes. Trump's valuation was eye watering, I still can't believe it, but the market players agreed to it. The banks agreed to the valuation and under no coercion agreed to lend money with it as collateral. Trump pays off that loan and the banks are made whole. By contrast my school board telling me my house is worth 600 k instead of 400 k scares the shit out of me. I can't agree to it and my only recourse are the courts. The school board has lawyers on staff so it costs them nothing if I sue.
- anigbrowl 2y ago
  The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal This is just wrong. The very low valuation was not proposed by the NY court, but by the Palm Beach County tax appraiser. This is because the property is deeded for use as a social club rather than a private residence (a condition of sale when Trump purchased it iirc, and one which affects future disposal of the property) and as a commercial entity the value is appraised as a multiple of business income.

throwaway2037 2y ago

You raise a good point. I found this page from the Norway tax authority. (In a previous post, I noted that Norway had had a wealth tax for a long time. About 1%.) > When calculating wealth tax, you must include any assets that you own at the end of the year. These assets must generally be valued at what the asset is worth on the open market. However, an exception is made in the case of housing, and a lower value, known as the tax value, must be used when calculating wealth tax. Ref: https://www.skatteetaten.no/en/rates/tax-value-of-housing/ https://www.skatteetaten.no/en/rates/tax-value-of-housing/ Two things stand-out to me: (1) "assets must generally be valued at what the asset is worth on the open market". I guess there will be GAAP accounting rules about how to value less liquid assets. Tradable securities are easy to value; other things, like artwork are less easy to value. In the case of a car, an accountant could reasonably use an online used car marketplace to find a value. (The US has something called the Kelley Blue Book.) (2) "an exception is made in the case of housing". It sounds like there is a totally different set of rules for taxing housing (land+building).