No tax option: Borrow from company and then get note forgiven.
What do privately owned business do then?
The initial $1M is absolutely taxed when given.
This guide is stupid
of course the risk of debt is not considered
this is the same as someone taking a loan on the equity in their house
I thought they payed more taxes than anyone?
What if the stocks go down or the company goes busts. Seems like living paycheck to paycheck too. Maybe that is why they are so cheap and never tip…
The 1 million the CEO receives in company stock is taxed, the “less tax” column is incorrect.
Same thing as a whole term life insurance policy right? Like once it reaches a certain cash value?
This is dumb. I’m all for restricting the amount of murder that the ultra wealthy get away with, but this is shortsighted and not the entire picture. What is up with this sub?
Are you guys familiar with contractors works? Like working inside or outside ir35 in the uk?
Funny I just saw the accounting sub talking about this
Yeah this is the whole game, you have $10M in stock you barrow $10m against it to buy a home, then you can take a second out on the home for say $4M and get a little yacht.
This guide is so ridiculous. 25% tax is on investment gains. If your compensation is in the form of shares, you absolutely pay normal income tax on that.
This is so blatantly wrong it’s intentional.
What if I own the company? Like Amazon or Facebook?
They are postponing taxes they are not “Paying no taxes”. When they die their estate will have to pay taxes, with some caveats.
Redditors always act like they are smarter than the general population then they promote misinformation like this
This is seriously dumb. Whether the $1M is in US Dollars or in shares of stock worth that much, it’s taxed as regular income once the recipient gains possession of it.
What about the interest on the loan. That does not sound any better either. Eventually the loan will become payable. Sell the stock and pay taxes.
This is nonsense. In all 3 scenarios the person will pay “NORMAL” income tax.
The “no tax” / “less tax” scenarios happen when someone is grated $1 worth of company stock, which later grows into millions.
There is no magical way for company to pay a million dollars to someone without taxation.
It just happens to be that small fraction of founders and or early employees of successful companies end up with unrealized gains.
And how to tax unrealized gains is a very different conversation. A conversation worth having.
Many people have suggested a quick fix for this: every time you borrow money against a collateral, tax it as income.
However this would create many problems.
The whole financial system is based on banks / funds using shares / bonds as collateral. That would essentially kill the borrowing market, which is vital to the economy. Would you exclude non-physical persons from this rule? That seems unfair.
What about people taking loans against their houses? Would you limit this rule to equity? That also seems rather arbitrary.
Any time you come up with additional rules, you will open up a new problem. In the end, any rule can be gamed by people with access to top accountants.
Don’t they have to pay back what they borrowed against?
23 comments
No tax option: Borrow from company and then get note forgiven.
What do privately owned business do then?
The initial $1M is absolutely taxed when given.
This guide is stupid
of course the risk of debt is not considered
this is the same as someone taking a loan on the equity in their house
I thought they payed more taxes than anyone?
What if the stocks go down or the company goes busts. Seems like living paycheck to paycheck too. Maybe that is why they are so cheap and never tip…
The 1 million the CEO receives in company stock is taxed, the “less tax” column is incorrect.
Same thing as a whole term life insurance policy right? Like once it reaches a certain cash value?
This is dumb. I’m all for restricting the amount of murder that the ultra wealthy get away with, but this is shortsighted and not the entire picture. What is up with this sub?
Are you guys familiar with contractors works? Like working inside or outside ir35 in the uk?
Funny I just saw the accounting sub talking about this
Yeah this is the whole game, you have $10M in stock you barrow $10m against it to buy a home, then you can take a second out on the home for say $4M and get a little yacht.
This guide is so ridiculous. 25% tax is on investment gains. If your compensation is in the form of shares, you absolutely pay normal income tax on that.
This is so blatantly wrong it’s intentional.
What if I own the company? Like Amazon or Facebook?
They are postponing taxes they are not “Paying no taxes”. When they die their estate will have to pay taxes, with some caveats.
Redditors always act like they are smarter than the general population then they promote misinformation like this
This is seriously dumb. Whether the $1M is in US Dollars or in shares of stock worth that much, it’s taxed as regular income once the recipient gains possession of it.
What about the interest on the loan. That does not sound any better either. Eventually the loan will become payable. Sell the stock and pay taxes.
This is nonsense. In all 3 scenarios the person will pay “NORMAL” income tax.
The “no tax” / “less tax” scenarios happen when someone is grated $1 worth of company stock, which later grows into millions.
There is no magical way for company to pay a million dollars to someone without taxation.
It just happens to be that small fraction of founders and or early employees of successful companies end up with unrealized gains.
And how to tax unrealized gains is a very different conversation. A conversation worth having.
Many people have suggested a quick fix for this: every time you borrow money against a collateral, tax it as income.
However this would create many problems.
The whole financial system is based on banks / funds using shares / bonds as collateral. That would essentially kill the borrowing market, which is vital to the economy. Would you exclude non-physical persons from this rule? That seems unfair.
What about people taking loans against their houses? Would you limit this rule to equity? That also seems rather arbitrary.
Any time you come up with additional rules, you will open up a new problem. In the end, any rule can be gamed by people with access to top accountants.
Don’t they have to pay back what they borrowed against?
So Tim Cook is fucking wealthy
But how do they pay back the loan
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