thx1139 said:
But you can also avoid that. I for instance have a 2% LOC against my investments so I can gain access to the gains without actually selling the stock. When I pass away if I leave stock to my kids the capital gains on that stock is erased. The kids if they sell the stock immediatly are accessed gains at the price the stock was at when I left it to them. Not what I paid for them. So for instance I bought Apple at like $50 before the split. I bought MS at like $20. I can just hold those stocks and they gain gain gain. Say I drop dead. My kids get the Apple stock which is now roughly a $650 per share gain. My kids wouldnt pay tax on the $650 they would pay no tax if they sold it as soon as they got it. See how the game is rigged for the aristocracy. Hold your capital gains, get a low interest loan to access the value and leave to your heirs basically tax free.
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Oh believe me, I know there are tons of perfectly legal ways to avoid paying tax. But the situation you described is limited to the estate exclusion anyways, after which they would be paying a 35% estate tax (as well as additional state estate taxes, if your state has them, like mine does).
Besides that, there are numerous reasons to not use a LOC against investments.
A) It is risky, as your investments could dramatically decrease in value in a short time span
B) The purpose of me saving, and working to pay off huge things as fast as possible is so I don't have to deal with debt anymore. I could probably make loads more in the market investing than I would pay for interest on a home, too, but I would much rather pay the home off quickly and get it out of my way and get rid of the stress associated with it.
If you like a life riddled with debt and the stress associated for it just to avoid a measley 15% LTCG tax rate, then all the power to you, though.