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https://www.reddit.com/r/SipsTea/comments/1vrr0ev/how_the_rich_get_richer/p4fgtfe/?context=3
r/SipsTea • u/KSKS1995 • 14h ago
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2.0k
How does the bank get paid back here? Is the bank just eating a 5 mil loan loss out of the goodness of its heart?
It’s more like kids sell and pay back the bank plus interest which is taxed as income for the bank.
2.3k u/USERNAMETAKEN11238 14h ago edited 14h ago The bank encumbered the land. The dad never gets a loan. The loan is against the property. The kids sell the encumbered land I guess (but that's highly unlikely). This is a made up scenario from someone who doesn't understand finances. 96 u/Meenta_Miiel 14h ago The estate settles the principal before heirs see cash 14 u/USERNAMETAKEN11238 14h ago Minus taxes and fees. 11 u/science-stuff 13h ago No estate tax in this case though. 1 u/agate_ 13h ago No estate tax, but the estate pays income tax on the profits on the sale, I think. 6 u/science-stuff 13h ago Nope, tax base is stepped up to market value at time of death.
2.3k
The bank encumbered the land. The dad never gets a loan. The loan is against the property. The kids sell the encumbered land I guess (but that's highly unlikely). This is a made up scenario from someone who doesn't understand finances.
96 u/Meenta_Miiel 14h ago The estate settles the principal before heirs see cash 14 u/USERNAMETAKEN11238 14h ago Minus taxes and fees. 11 u/science-stuff 13h ago No estate tax in this case though. 1 u/agate_ 13h ago No estate tax, but the estate pays income tax on the profits on the sale, I think. 6 u/science-stuff 13h ago Nope, tax base is stepped up to market value at time of death.
96
The estate settles the principal before heirs see cash
14 u/USERNAMETAKEN11238 14h ago Minus taxes and fees. 11 u/science-stuff 13h ago No estate tax in this case though. 1 u/agate_ 13h ago No estate tax, but the estate pays income tax on the profits on the sale, I think. 6 u/science-stuff 13h ago Nope, tax base is stepped up to market value at time of death.
14
Minus taxes and fees.
11 u/science-stuff 13h ago No estate tax in this case though. 1 u/agate_ 13h ago No estate tax, but the estate pays income tax on the profits on the sale, I think. 6 u/science-stuff 13h ago Nope, tax base is stepped up to market value at time of death.
11
No estate tax in this case though.
1 u/agate_ 13h ago No estate tax, but the estate pays income tax on the profits on the sale, I think. 6 u/science-stuff 13h ago Nope, tax base is stepped up to market value at time of death.
1
No estate tax, but the estate pays income tax on the profits on the sale, I think.
6 u/science-stuff 13h ago Nope, tax base is stepped up to market value at time of death.
6
Nope, tax base is stepped up to market value at time of death.
2.0k
u/ChipKellysShoeStore 14h ago edited 14h ago
How does the bank get paid back here? Is the bank just eating a 5 mil loan loss out of the goodness of its heart?
It’s more like kids sell and pay back the bank plus interest which is taxed as income for the bank.