The borrow-sale technique

Estate planning and Income tax strategies fo the rich and Famous: Here is the first installment. It is called the Borrow-Sale Technique. Say, you have a stock portfolio of 50 million or even more. Step 1. Borrow most of the value from the bank using stock as collateral. Step 2. Buy both puts and calls to lock in value. Step 3 give the stock to the bank several years later to pay off the loan. The effect of this is that you have use of the cash for several years and only pay capital gains taxes when you give the stock to the bank. Thus, you have your money working for you for several years without paying taxes

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One Response to The borrow-sale technique

  1. Sandytaxman says:

    I wanted to add something. You would use stock that pays enough dividends to about cover the interest. Secondly, this strategy only should be used if you have a great investment need for the money that will give you a substantial rate of return.

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