If he sells the stock, he will need to pay taxes on $11.75 million in gains.
But he doesn't do that; instead, he places the stock into a trust.
Then, he takes out a loan against the trust.
Loans are not considered income.
Therefore, no taxes are owed.
He lives off the loan.
He never sells the stock.
He still holds the asset at the time of his death.
His children inherit the asset at a cost basis of $12 million.
The IRS (IRS) doesn't collect a single penny.
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Tax Evasion Tips for Wealthy Americans
A father buys stocks for $250,000.
The stock appreciates to $12 million.
If he sells the stock, he will need to pay taxes on $11.75 million in gains.
But he doesn't do that; instead, he places the stock into a trust.
Then, he takes out a loan against the trust.
Loans are not considered income.
Therefore, no taxes are owed.
He lives off the loan.
He never sells the stock.
He still holds the asset at the time of his death.
His children inherit the asset at a cost basis of $12 million.
The IRS (IRS) doesn't collect a single penny.