Who can guarantee a return on capital?

Tech stocks are down 50-75% now. You think it was smarter to borrow money against that equity rather than sell and pay taxes?

Like I said, it's all theoretical, yet no one has actually shown me numbers that makes sense.

Delay selling equity? Sure? Delay it until you are dead? No way (unless you're within a few years of dying).

You don't even need a significant return on capital for the strategy to pay off, it just has to slightly beat the interest on the loan over a very long time horizon. Consider these numbers: $100 million subject to capital gains, $10 million in cash needed for expenses, a 2% interest rate, a 2.5% return on investment, a 20% capital gains tax, and a 10 year timeframe.

The borrowing strategy starts with $100 million and a $10 million loan, and ends up with $128 million and a $12.2 million loan, so net $115.6 million (and the interest is likely tax deductible).

The taxpaying strategy starts with $88 million and ends up with $112.65 million.

Over what time period? And you’re ignoring interest rate and equity return risk.

It’s pointless to do unless you can do it until you’re dead so capital gain tax is actually reduced.

Otherwise you’re just deferring the tax. Which has value, but isn’t avoid tax.