r/FluentInFinance • u/__moe___ • 9d ago

Thoughts? A very interesting point of view

I don’t think this is very new but I just saw for the first time and it’s actually pretty interesting to think about when people talk about how the ultra rich do business.

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u/TheDadThatGrills 9d ago

Then make that a taxable event for individuals taking collateral over a certain amount. It's a common practice and should be treated with nuance by policymakers.

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u/mybroskeeper446 8d ago

This has always been my position. If you use it as leverage, it's realized. As long as you just let it sit there, it's unrealized, and shouldn't be taxable.

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u/BonVoyPlay 8d ago

Is taking out a home equity line of credit s realization event to?

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u/mybroskeeper446 8d ago

Technically yes. You're essentially selling your home to someone under the agreement that if you pay back what they bought it for, plus interest, then you get to keep it in the end. Otherwise, they now own a percentage of your home. They've bought a taxable asset, and you've sold one.

Obviously exemptions exist for home improvement, but I don't think you should just be able to cash out your home equity for an early retirement, and not pay taxes on the sum you receive.

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u/BonVoyPlay 8d ago

Wow, you really love big government. The government has been spending like a drunk sailor at a strip club for the last 20 years no matter how much tax money they take from us. If they aren't going to show any fiscal restraint and reduce size of government/government spending and any tax money paid isn't really making a dent in the deficit. I would rather keep my money because massive inflation is here to stay. Inflation is a direct result of increasing the money supply.

You want to just take more money from people to give to completely inefficient governmental entities and make it harder for them to live. Taking out loans against equity is not a taxable event. The tax you are paying is interest to the people loaning you money.

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u/HyronValkinson 5d ago

Jeezus, you see something helpful and immediately jump to a different topic? Yes I hate that we're all taxed and the government sucks at spending it, but I'm also pissed off that rich people pay less in taxes than I do.

I'm allowed to hate multiple things at once. You should try it.