Oct 28, 2021
10:41:17am
10:41:17am
They pay interest on the loans, and pay it from their income earned. All large brokerage houses do these loans.
I worked for a brokerage house in their bank for a short time and oversaw some underwriting on loans like these on the legal end. This was 20 years ago. So this is nothing new and very common.
The banks will loan up to 80% of value typically with 50% being most common, and charge interest. So they do need to be paid back over time. But they were loans on portfolios so it was a better deal to pay interest on the loan than to pay capital gains taxes on selling the assets.
THe trade off is that the money stayed in the markets helping those companies they had holdings in and propping up markets.
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- lawboy
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- Turnpike Lane
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- Dec 14, 2004
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Messages
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10/28/21 10:46am
10/28/21 10:50am
10/28/21 10:53am
10/28/21 10:55am
10/28/21 10:58am
This is incorrect man. They can wait until they pass away, get a step in basis on their assets, and have all that growth
10/28/21 11:11am
10/28/21 11:56am
10/28/21 10:46am
They can let the debt run up forever and then have it paid for with assets that have stepped up in basis at their death.
10/28/21 10:39am
10/28/21 1:05pm
10/28/21 10:53am
10/28/21 10:55am
10/28/21 10:57am