Who's paying the loans?
Text content
Dad buys stock at $250K. It grows to $12M. If he sells, he owes tax on an $11.75M gain. Instead, he puts it in a trust. Borrows against it. Borrowing is not income. So no tax. He lives on loans. Never sells. He dies holding the asset. Kids inherit at a $12M basis. IRS gets $0.
Overview
A text-based meme that outlines a hypothetical tax avoidance strategy where a father avoids capital gains tax on a significantly appreciated stock. The scenario explains: buying stock at $250K, which grows to $12M; avoiding selling (to evade $11.75M gain tax) by placing the asset in a trust, borrowing against it (since borrowing isn't taxable income), living on these loans, never selling, and passing the asset to children with a stepped-up basis, resulting in the IRS collecting no tax.
Origin notes
The meme originates from 9Gag, as indicated by the provided source information. It presents a simplified explanation of a tax loophole often discussed in contexts of wealth management and tax avoidance, framed as a hypothetical narrative about a father's financial strategy.
