Buy, Borrow, Die. Legally Never pay Taxes.

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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Tue Jun 15, 2021 4:48 pm

Xan wrote:
Tue Jun 15, 2021 3:59 pm
And regardless, your two final amounts are almost identical.
This is a good point, in the sense that for this to work, the gain should be greater than the interest payments on the margin.

Maybe I'll make a more detailed spreadsheet this evening that tries to account for the cost of carrying the loan and see how it stands up.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Tue Jun 15, 2021 4:50 pm

Xan wrote:
Tue Jun 15, 2021 4:46 pm
Mark Leavy wrote:
Tue Jun 15, 2021 4:31 pm
Whatever you do, you end up with more if you only pay taxes at the end.
Definitely not true: simulate taking the 20% off the balance at the beginning, as opposed to taking it off the end or in the middle. You'll get the same end result as paying at the end.
I'm not following. I'd have to see some numbers to understand what you are saying here.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Xan » Tue Jun 15, 2021 4:56 pm

Mark Leavy wrote:
Tue Jun 15, 2021 4:50 pm
Xan wrote:
Tue Jun 15, 2021 4:46 pm
Mark Leavy wrote:
Tue Jun 15, 2021 4:31 pm
Whatever you do, you end up with more if you only pay taxes at the end.
Definitely not true: simulate taking the 20% off the balance at the beginning, as opposed to taking it off the end or in the middle. You'll get the same end result as paying at the end.
I'm not following. I'd have to see some numbers to understand what you are saying here.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Tue Jun 15, 2021 5:01 pm

Xan wrote:
Tue Jun 15, 2021 4:56 pm
Mark Leavy wrote:
Tue Jun 15, 2021 4:50 pm
I'm not following. I'd have to see some numbers to understand what you are saying here.
tax_screenshot.png
Thanks. I understand now.

That scenario has nothing to do with the approach I am discussing. I assume that you are starting with $1M after tax dollars to invest and you either pay taxes on the gains each year, or you defer the taxes and pay later. The deferred taxes always win. There is no scenario where you would pre-pay $200K in taxes.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Xan » Tue Jun 15, 2021 5:11 pm

Mark Leavy wrote:
Tue Jun 15, 2021 5:01 pm
Xan wrote:
Tue Jun 15, 2021 4:56 pm
Mark Leavy wrote:
Tue Jun 15, 2021 4:50 pm
I'm not following. I'd have to see some numbers to understand what you are saying here.
tax_screenshot.png
Thanks. I understand now.

That scenario has nothing to do with the approach I am discussing. I assume that you are starting with $1M after tax dollars to invest and you either pay taxes on the gains each year, or you defer the taxes and pay later. The deferred taxes always win. There is no scenario where you would pre-pay $200K in taxes.
Okay, great.

I find it startlingly common for people to think that "the magic of compounding" means that paying taxes at the end is always better, and are startled to find it doesn't actually make any difference whether taxes are paid ahead of time or at the end.

I think this is related to what you're talking about: the difference of whether to pay in the middle or at the end is pretty minor.

Avoiding completely via step-up, now we're talking.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Smith1776 » Tue Jun 15, 2021 5:35 pm

The commutative property.
I still find the James Rickards portfolio fascinating.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by ahhrunforthehills » Tue Jun 15, 2021 7:10 pm

Hi Mark,

Great topic. I too have been curious about this. I just ran a spreadsheet that would account for the margin, LTV, etc. over a 50 year period.

It appears based on my data (which might be riddled with errors) that in order to do this somewhat safely you would need to keep your Withdrawal Rate at approximately 1/3 of your whatever your annual growth rate is for the overall portfolio. At a 1% margin, it will limit your overall loan exposure to about 15% of your portfolio value.

The real problem seems to be keeping a broker giving you that 1% margin. As the margin % increases, you also appear to need to have your market performance increase in-step as well (otherwise your LTV starts becoming dangerous). However, I am not sure this is possible since rising interest rates should theoretically be a drag on equities.

I am interested to see if you come to the same conclusion in your research.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Tue Jun 15, 2021 7:31 pm

ahhrunforthehills wrote:
Tue Jun 15, 2021 7:10 pm
Hi Mark,

Great topic. I too have been curious about this. I just ran a spreadsheet that would account for the margin, LTV, etc. over a 50 year period.

It appears based on my data (which might be riddled with errors) that in order to do this somewhat safely you would need to keep your Withdrawal Rate at approximately 1/3 of your whatever your annual growth rate is for the overall portfolio. At a 1% margin, it will limit your overall loan exposure to about 15% of your portfolio value.

The real problem seems to be keeping a broker giving you that 1% margin. As the margin % increases, you also appear to need to have your market performance increase in-step as well (otherwise your LTV starts becoming dangerous). However, I am not sure this is possible since rising interest rates should theoretically be a drag on equities.

I am interested to see if you come to the same conclusion in your research.
Awesome. I just finished a first draft of my spreadsheet and read your post.

Depending on the numbers you use, it can take about 80 years to reach LTV convergence.

With 4% withdrawal, 2% interest and 6% growth, your leverage converges at 2X in 77 years and then stays there.
With 2% withdrawal, 2% interest and 8% growth, your leverage converges at 1.33X in 53 years.

Obviously real world conditions would be quite variable, but... pretty easy to do some back of the envelope calcs to check your risk tolerance.

In the spreadsheet below, I assume that loan interest payments aren't actually paid, but just increase the size of the margin loan.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Tue Jun 15, 2021 7:41 pm

ahhrunforthehills wrote:
Tue Jun 15, 2021 7:10 pm
I am interested to see if you come to the same conclusion in your research.
Yes, pretty much. I don't have a closed form solution yet, but it looks like I converge to 1.37 for 9% growth, 3% withdrawal and 1% interest.
Again, this is counting the interest payments as being drawn against the margin loan - in addition to the cost of living withdrawals.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by glennds » Tue Jun 15, 2021 7:52 pm

Mark Leavy wrote:
Tue Jun 15, 2021 3:57 pm
Xan wrote:
Tue Jun 15, 2021 3:36 pm
Mathematically, assuming the tax rate stays the same, it doesn't make any difference. You'll have exactly the same at the start as at the end. So having 20% more to "grow faster" doesn't matter since afterwards the 20% cut will be bigger.
...

Maybe I'm still missing it, though.
You might be missing how compounding works. Here is a quick and dirty spreadsheet that I just threw together to show how your two scenarios would play out.


Screen Shot 2021-06-15 at 10.54.51 AM.png
Mark,
I'm totally confused now. I thought the two scenarios were (1) selling assets from the portfolio to pay living expenses, and paying the capital gains arising from the sale versus (2) not selling assets to pay living expenses and instead incurring margin or pledged asset debt.

Your spreadsheet is simply comparing pay now or pay later taxes. But what about the money you're withdrawing for living expenses under scenario 1 versus paying back the loan plus accrued interest at end of term under scenario 2?
I'm expecting scenario 2 to result in a materially larger compounded portfolio at end of term, even after paying off the accrued debt because nothing has been sold or withdrawn for living expenses, and no taxes have been incurred. That's the whole thesis after all.
Have I missed something?

BTW, on a related note, I would presume that under this type of strategy, you would use debt to purchase new assets in the course of rebalancing. The idea being to never, ever sell anything at a gain during the term (your lifetime). I see this question has come up in the thread.

Also, don't these types of margin loans accrue interest, which does mean you are incurring interest on interest, but that's still cheaper than withdrawing from the portfolio?
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Tue Jun 15, 2021 7:56 pm

glennds wrote:
Tue Jun 15, 2021 7:52 pm
Your spreadsheet is simply comparing pay now or pay later taxes.
That was only to answer a specific hypothetical from Xan as to what would happen if the feds eliminated the step up on basis at death.

I'm not proposing any "pay later taxes" at all :)
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by glennds » Tue Jun 15, 2021 8:21 pm

Mark Leavy wrote:
Tue Jun 15, 2021 7:56 pm
glennds wrote:
Tue Jun 15, 2021 7:52 pm
Your spreadsheet is simply comparing pay now or pay later taxes.
That was only to answer a specific hypothetical from Xan as to what would happen if the feds eliminated the step up on basis at death.

I'm not proposing any "pay later taxes" at all :)
Got it.

I hope you model the two scenarios as a comparison. Of course I have to remind myself that the uber wealthy are doing this sort of thing while they hold stock that is appreciating at phenomenal rates, certainly in comparison to a Permanent Portfolio.
But I think your question of whether it will still be beneficial to mortals is a good one. I'm expecting the no-withdrawal, tax deferred or avoided scenario to result in a much larger ending portfolio even after deducting out the accrued debt.

Interesting topic.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Xan » Wed Jun 16, 2021 7:31 am

tomfoolery wrote:
Wed Jun 16, 2021 1:17 am
Xan wrote:
Tue Jun 15, 2021 3:59 pm
And regardless, your two final amounts are almost identical.
Looks to be about a $130k difference. Seems fairly different to me.
It's right at 5% over a period of 20 years. It's a lot of work and risk for a result that'll be lost in the noise of actual investment returns / taxes.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by ahhrunforthehills » Wed Jun 16, 2021 1:27 pm

I just ran a comparison between living off of margin vs paying annual capital gains taxes.

It seems to really boil down to portfolio performance and how many years you will still be in the market. A high annual return combined with a low withdrawal rate makes living off a margin loan a winner after just a few years.

But if the portfolio performance sucks going forward, those margin loan payments start becoming a drag on performance and, as a result, your leverage will start climbing (risking the possibility of a margin call)... even at conservative 1-2% withdrawal rates.

Assuming that my data is correct (which nobody should do), to stay safe it seems like you would need to only withdrawal approximately 1/5 to 1/8 of whatever the growth rate is for the year. This should keep your leverage between the 15%-25% levels. Obviously large fluctuations in the market year to year would throw this off and change the risk.

With all that said, the REAL problem I see when crunching the data and comparing both scenarios is how painfully clear taxes erode your real net worth. This is something that is rarely paid attention to since most worksheets exclude tax impact (since it is so individualized).

IMHO, if you have a substantial net worth (can easily weather a 3-5 year draw-down) in non tax-deferred accounts, the PP would be a pretty leaky boat anyways. All of that income being thrown off by half of the investments and the rebalancing is just a drag on performance. With a sizeable nest egg you don't need to care as much about year-to-year volatility (assuming you don't have excessive living expenses).

There are a lot of "ifs" in making an investment plan. But paying taxes is an absolute certainty... once you write that check it is 100% guaranteed your Uncle Sam will cash it. Deferring as much of your tax liability as possible is absolutely the name of the game. You never know when a tax loophole or favorable tax law will give you an opportunity to come out ahead in the future.

One thing is for sure, if they raise the cap tax rate, living off of margin loans becomes a lot more attractive.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by glennds » Wed Jun 16, 2021 1:59 pm

ahhrunforthehills wrote:
Wed Jun 16, 2021 1:27 pm


One thing is for sure, if they raise the cap tax rate, living off of margin loans becomes a lot more attractive.
Great feedback, thanks.
I might suggest a qualifier to your comment above - if they raise the cap tax rate AND assuming interest rates stay low. Either one moving in either direction impacts this scenario.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Wed Jun 16, 2021 7:38 pm

Given that it could be feasible under the right conditions (thanks! ahhrunforthehills), the last piece of the puzzle seems to be how to handle re-balancing.

My first blush at that would be to just buy a single ETF that is a bond/equity mix. And then also hold some physical gold outside the system. The ETF stays internally balanced and I would adjust the gold holdings judiciously.

Other ideas for keeping a balanced portfolio without generating taxable events?
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by ahhrunforthehills » Wed Jun 16, 2021 8:31 pm

Mark Leavy wrote:
Wed Jun 16, 2021 7:38 pm
Given that it could be feasible under the right conditions (thanks! ahhrunforthehills), the last piece of the puzzle seems to be how to handle re-balancing.

My first blush at that would be to just buy a single ETF that is a bond/equity mix. And then also hold some physical gold outside the system. The ETF stays internally balanced and I would adjust the gold holdings judiciously.

Other ideas for keeping a balanced portfolio without generating taxable events?
If you haven’t seen this before, you might find it helpful:

https://youtu.be/MhszdAX9Leg

This is a really good topic... I couldn’t convince my wife to do the Puerto Rico act 60 and I couldn’t find anyone to donate my land to as a conservation easement. So I am definitely on the lookout for options.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by glennds » Wed Jun 16, 2021 8:51 pm

Mark Leavy wrote:
Wed Jun 16, 2021 7:38 pm
Given that it could be feasible under the right conditions (thanks! ahhrunforthehills), the last piece of the puzzle seems to be how to handle re-balancing.

My first blush at that would be to just buy a single ETF that is a bond/equity mix. And then also hold some physical gold outside the system. The ETF stays internally balanced and I would adjust the gold holdings judiciously.

Other ideas for keeping a balanced portfolio without generating taxable events?
Yes, re-balance by borrowing to buy the lagging asset rather than selling anything. No taxable event.
You're already an alcoholic at this point, so just order another drink.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Wed Jun 16, 2021 9:02 pm

ahhrunforthehills wrote:
Wed Jun 16, 2021 8:31 pm
If you haven’t seen this before, you might find it helpful:

https://youtu.be/MhszdAX9Leg
Thank you for that. Extremely applicable. Back to the spreadsheets for me this evening...
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Wed Jun 16, 2021 10:16 pm

In the US, futures are marked to market and taxed at 60% long term capital gains and 40% short term capital gains.

Futures have a ton of uses (including the implicit low cost margin), but without some sort of tax protection/deferral, they are taxed more than regular long term capital gains. And you have to pay the tax on the gains every year. They do have some advantages for tax losses as they can be applied retroactively.

So... definitely cheaper leverage if you use futures for your position and pull your living expenses out of the large cash cushion. No tax advantage, though. My guess is that it wouldn't compete. Certainly worth running the numbers.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by WiseOne » Thu Jun 17, 2021 7:56 am

How might Biden's plan to increase capital gains taxes to match ordinary income tax rates affect this calculation?

If that plan passes, I'll probably do what virtually everyone else in the US will do: immediately sell then rebuy all taxable non-cash assets to claim the capital gains at the lower rates before the new law takes effect.

After that, the margin plan might indeed be worth considering.

A couple of questions though. First, what do you do when interest rates go up? Over a long enough time horizon that's something you have to consider. Second, what happens when you start incurring lots of expenses (like home health care or a nursing home) and need to cash in some of those assets?

I could see doing this for a portion of assets that you think you'll never have to sell, but certainly not for all of them. As for rebalancing and avoiding triggering taxable events, well that's what Roth IRAs are for. Converting as much taxable & tax-deferred assets as possible into a Roth before taking social security is a key and very necessary strategy. It will also give you a chance of avoiding tax on Social Security benefits.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Xan » Thu Jun 17, 2021 8:06 am

WiseOne wrote:
Thu Jun 17, 2021 7:56 am
How might Biden's plan to increase capital gains taxes to match ordinary income tax rates affect this calculation?

If that plan passes, I'll probably do what virtually everyone else in the US will do: immediately sell then rebuy all taxable non-cash assets to claim the capital gains at the lower rates before the new law takes effect.

After that, the margin plan might indeed be worth considering.

A couple of questions though. First, what do you do when interest rates go up? Over a long enough time horizon that's something you have to consider. Second, what happens when you start incurring lots of expenses (like home health care or a nursing home) and need to cash in some of those assets?

I could see doing this for a portion of assets that you think you'll never have to sell, but certainly not for all of them. As for rebalancing and avoiding triggering taxable events, well that's what Roth IRAs are for. Converting as much taxable & tax-deferred assets as possible into a Roth before taking social security is a key and very necessary strategy. It will also give you a chance of avoiding tax on Social Security benefits.
As I understand the Biden plan, the new cap gains rates only apply to income above $1 million in a year. So it isn't really a slam dunk for everybody to sell and re-buy everything.

The people who really get punished are small business owners when they go to sell. I don't know of a way to sell and re-buy a sole proprietorship... Maybe in a partnership the partners could swap their equity and pre-pay their taxes? Sounds like the kind of thing that wouldn't pass the smell test.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Kbg » Thu Jun 17, 2021 10:09 am

Speaking of praise be...a thread worthy of participating in.

Mark,

What comes next is just nuance to consider, not for or against anything.

- The interest rate is variable and so you have a defacto imputed cost of money...which is helpful by itself as the "worth it or not" calculation will change with interest rate changes. Currently, what you propose makes financial sense. But notionally speaking, let's say it's the 1970s again with margin rates at 15% and your marginal tax rate is up at 39%. The scheme is far less attractive (well, not attractive at all in my view).

- The broker WILL sell assets (triggering a tax event) to collect their interest fee monthly if you don't have it in cash...not a deal breaker, but something that will need to be managed and for that fact alone I'm trying to think of any way you aren't going to have to pay some taxes every year and I can't think of a scenario. As a side note, in IB you can specify what to sell first...so you have some control of what but not when or if

- Margin interest deductions are a tax offset to other investment income which under "normal circumstances" (if they even exist anymore) yields at best netting out any investment profits. At times I'll "manage" a margin loan to net out dividends received. Elsewise it's always a cost

- If you have a large portfolio such that you may be of interest to the IRS, I'd make sure you are versed up on what margin loans can and can not be used for

- And probably the most important part, you inject a TON of risk depending on how bad a drawdown is in your portfolio. Not a big deal early, but say after 10-15 years, you've got risk issue to manage unless you assume quite a few rosy things are going to happen as well.

Personally, I'd do a bunch of financial modeling before I launched on the endeavor. You might be able to avoid the taxman, but sequence risk is amplified. Most standard financial planning will seek to mitigate sequence risk by suggesting paying off debt/a mortgage etc. Living a really long time would not be helpful either. ;-)
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by ahhrunforthehills » Thu Jun 17, 2021 12:10 pm

Kbg wrote:
Thu Jun 17, 2021 10:09 am
Speaking of praise be...a thread worthy of participating in.
+1

I often find Mark's posts to be a breath of fresh air.

WiseOne wrote:
Thu Jun 17, 2021 7:56 am

A couple of questions though. First, what do you do when interest rates go up? Over a long enough time horizon that's something you have to consider. Second, what happens when you start incurring lots of expenses (like home health care or a nursing home) and need to cash in some of those assets?

In my spreadsheet, the interest payments get deducted from the growth. So if you are just withdrawing a set % of the actual growth it should be accounted for. I think, with a plan like this, you need to decide if you want a steady stream of withdrawals (which increase the risk of whip-sawing LVRs) or whipsawing withdrawals (which decrease the risk of whip-sawing LVRs). This ties in with your second question...

To go "all-in" on this plan is probably only "safe" for someone with an extremely high wealth/living expenses ratio. For example, taking your annual expenses and multiply that number by 50 to 80 (depending on how "safe" you need to be to feel "safe").

To live like someone in the upper-middle class, you would need 8 figures in net worth.

Kbg wrote:
Thu Jun 17, 2021 10:09 am
Speaking of praise be...a thread worthy of participating in.

As a side note, in IB you can specify what to sell first...so you have some control of what but not when or if
This brings up another point. In other forums I have read that IB will be quick to change their margin requirements with practically no notice. This is why it would be extremely important to only be borrowing an insanely low percentage of the total growth of the assets.

Xan wrote:
Thu Jun 17, 2021 8:06 am


As I understand the Biden plan, the new cap gains rates only apply to income above $1 million in a year. So it isn't really a slam dunk for everybody to sell and re-buy everything.

The people who really get punished are small business owners when they go to sell. I don't know of a way to sell and re-buy a sole proprietorship... Maybe in a partnership the partners could swap their equity and pre-pay their taxes? Sounds like the kind of thing that wouldn't pass the smell test.
+1

There is a lot of activity right now for people selling their businesses just for this reason. Cashing out for 20% is a sweetheart deal. It also doesn't get hit with the Obama 3.8% investment tax.

I am no CPA (so take with a grain of salt), but as long as you have a valid business reason... perhaps you could sell it to an irrevocable trust (non-grantor) and then have the irrevocable trust sell it back at a later time. In fact, you don't need to actually sell your business; you could just sell the assets (tangible and/or intangible). As with all things in taxation, the complexity needed to make it a legitimate transaction in the eyes of the IRS needs to justify the tax savings.

I would think that what usually passes the smell test is probably heavily influences by the length of the activity and what activity occurred during that time. Or in other words, let's say you and I start a business today. We split the business 50/50.

I am going to contribute 100% of the money needed and you are going to contribute 100% of the brains. I suspect if we closed out the business too soon and it was a passive business, it would raise some eyebrows that the structure could be some type of abusive tax structure. However, if the business had "active' income for 10 years, the balance of intangible/tangible capital contributions would become less of an issue if it was an active business. But how muddy does the water get when that "active" income was created by "intangible" assets? How about an untraceable intangible asset like crypto-currency? The hurdles that are before the IRS in the electronic age are enormous. For those that are unaware, the IRS still uses those reel-to-reel tape computers from 50 years ago for their audits. By modern standards of technology, their kung-fu is weak.

Unfortunately/fortunately, taxation is black and white for most people. For those with substantial assets that aren't afraid of complex structures (or an expensive battle in tax court), taxation is all just one big grey area.

Case in point, want to know legal tax strategies? Just download the annual Analytical Perspectives directly from the White House. They pretty much list all the things they would like to change in regards to taxation for the year. However, the list doesn't really change that much annually because proposing changes and actually getting the votes are 2 very different thing in Washington: https://www.whitehouse.gov/wp-content/u ... c_fy22.pdf.

Looking for something more exotic? Look at PLRs. Poor people hide from the IRS, rich people run towards the IRS.

For those that are unaware, a PLR (Private Letter Ruling) is when rich people pay their tax attorney to draft their tax strategy (along with a sizeable check) and give it to the IRS. The IRS then makes a ruling as to whether the strategy (or loophole) is legit or it is not. Once the IRS says it is legit, they have now entered into a binding agreement with that entity and they can't be nailed for it later. It is my understanding that people (or entities) only file for a PLR when they are already 99.9% sure that they have the IRS by the nuts. Anyways, the PLRs are all public record. Nothing to stop anyone from gleaming insight from teams of $1,000+/hr tax attorneys. You can search through the PLRs on the IRS website (https://apps.irs.gov/app/picklist/list/ ... tions.html), but be warned, it is crazy boring. Also note that you can't use someone else's PLR for your own protection.

Disclaimer: This was not intended as tax, legal, and/or investment advice. Consult an attorney, tax advisor, and/or investment advisor.

P.S. Sorry if this seemed like a rant and veered a little off-topic.
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Re: Buy, Borrow, Die. Legally Never pay Taxes.

Post by Mark Leavy » Thu Jun 17, 2021 1:11 pm

Some really great summaries above. I'm also of the feeling that it would be a reasonable approach only if the current conditions were sustainable. And especially so, if there were a large increase in Capital Gains taxes. And I agree that you would need to live with a very low SWR. Some big ifs there.

While I really, really like the idea of never paying taxes again, I also have a strong aversion to being boxed in with debt. Having seen more than a few market crashes, the numbers don't quite come together for me on this. Someday I hope to live in 1040 poverty!

Given that, I'll probably keep this idea on the shelf until I become the next Elon Musk.

Currently, I'm doing almost the exact opposite of this strategy. I'm using futures for my equities and bonds holdings (slightly levered) and physical for my gold. Because of the futures, I'm sitting on a large pile of cash. Which just feels good, gives me the warm and fuzzies and turned out to be right handy last month when I needed to buy a condo for my mom.

This is the first year that I've used futures, so we'll see what I think of them when I do my taxes next year.

The commentary on this thread has been outstanding and I don't doubt that it will be the genesis of some new scheme or two.

Thanks!
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