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re: Buy, Borrow, Die feasability?
Posted on 5/28/26 at 12:33 pm to Everyday Is Saturday
Posted on 5/28/26 at 12:33 pm to Everyday Is Saturday
1. Borrow from the SBLOC to pay the IRS
2. Let the Roth account grow tax-free forever
3. Use your part-time job income or portfolio dividends to quietly pay off the SBLOC interest each month.
2. Let the Roth account grow tax-free forever
3. Use your part-time job income or portfolio dividends to quietly pay off the SBLOC interest each month.
0
Posted on 5/28/26 at 12:41 pm to Everyday Is Saturday
I won't pay back SBLOC, our heirs will. If I do this, my plan is to just let the SBLOC interest accrue. Heirs will pay it off from taxable portfolio (which will almost certainly be larger than if I had been selling shares to spend along way). Heirs get full step up in basis so no LTCG when they sell shares to cover the debt.
Same for spouse since she gets 50% of assets stepped up. I've told her to go ahead and pay it off at my death since she loses my pension will need to take less risk.
Same for spouse since she gets 50% of assets stepped up. I've told her to go ahead and pay it off at my death since she loses my pension will need to take less risk.
This post was edited on 5/28/26 at 12:42 pm
Posted on 5/28/26 at 1:05 pm to TorchtheFlyingTiger
What I find interesting about all of this, is that while this is one of the en vogue reddit talking points for their hatred of uber wealthy people, I actually see a lot of viability for your middle/upper class people that may have a decent taxable brokerage account but also aren't in any risk of ever hitting any estate tax issues. Can be a very good way to avoid the capital gains tax on that account to help supplement income or whatever they may need.
The uber wealthy would much rather pay the capital gains tax and pay these LOC's off prior to death than have the values go into their taxable estate and while it does happen where they die with them, I don't think that is actually the norm as some would have you believe. If the company stock or whatever they are using is actually valuable, they are probably planning to pass it on through a trust anyways as it is going to be tied to ownership of a business and not something they want to just be liquidated to take care of outstanding debts by the estate.
The uber wealthy would much rather pay the capital gains tax and pay these LOC's off prior to death than have the values go into their taxable estate and while it does happen where they die with them, I don't think that is actually the norm as some would have you believe. If the company stock or whatever they are using is actually valuable, they are probably planning to pass it on through a trust anyways as it is going to be tied to ownership of a business and not something they want to just be liquidated to take care of outstanding debts by the estate.
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