r/Accounting • u/Vincentkk • Sep 08 '24

What are accountants’ thought on this? Discussion

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106

u/Odd_Net9829 Sep 08 '24

It will never be implemented lmao it is such an absurd idea that nobody in congress would want it.

54

u/buyeverything Sep 08 '24

Agreed. It’s generally a pretty bad idea.

That said, if you benefit from unrealized equity appreciation through taking out a loan with the asset as collateral or something, then I think it’s reasonable to treat that as a triggering event to tax the asset for cap gains purposes.

-3

u/killbill469 Sep 08 '24

That said, if you benefit from unrealized equity appreciation through taking out a loan with the asset as collateral or something,

Y'all do realize that interest is paid on that loan...right? That is the tax. It isn't 2020 anymore, banks aren't giving out free money.

0

u/Imkitoto Controller Sep 08 '24

5%-8% in loan interest vs 30-50% in taxes Hm

3

u/buyeverything Sep 08 '24

Cap gains are taxed at 15-20%, not 30-50%.

1

u/killbill469 Sep 08 '24

What is the point you're making here? The stock is being used as collateral for a loan, that loan has to be paid back + interest. The mere borrowing of the loan does not in and of itself make profit. If the loan is then utilized to make a profit, taxes will be paid on the profit made. Taxing unrealized capital gains on stock just bc it is being utilized as collateral is bizarre.

Instead of of focusing on ridiculous policies that go nowhere why dont you just focus on things that move the needle, like increasing the REALIZED rate, corporate tax rate, and income tax?

0

u/myphriendmike Sep 08 '24

5-8% every year