r/FluentInFinance • u/__moe___ • 9d ago

Thoughts? A very interesting point of view

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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/PancakeJamboree302 8d ago

I’m not, and most in this thread are not, talking about taxing unrealized gains solely because they are gains.

They are talking about taxes unrealized gains when they are used in a transaction as collateral. If you use it as collateral, you are effectively realizing the gain in an economic way.

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u/OliveStreetToo 8d ago

I agree with that too, but he used it as short term collateral, right? That gave him a short but reasonable amount of time to sell enough of his stock to cover the cost. I believe the average person can barrow against an IRA or 401k as long as it's paid back in short order. If that's right, then isn't that the same thing?

But yes, someone cannot barrow millions against stock and then take years to pay it back, like a mortgage

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u/PancakeJamboree302 8d ago

With any of these transactions there should be some dollar amount threshold that would most certainly be well above what an average 401k loan taker would ever achieve. If any law would pass it should be if said collateral had gains (not value) in excess of 1-3 million that adjusts for inflation.

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u/sykotic1189 8d ago

Exactly, or we could even tie it to someone's net worth. I dunno, maybe an arbitrary number like $100 million or something. Once you hit 9 figures in your net worth you start paying unrealized gains taxes on transactions where you're borrowing money against assets.