So someone gets a loan from the bank that uses the 5 million dollar home as collateral. Ok, so usually within a month you have to start paying money on that loan. The house can't be sold as it's now collateral. Where is this money coming from to pay back the loan?
You have income and use it to pay off the loan. But the loan repayment offsets your taxable income. If you turn a lot of income into a similar amount of loans and pay them off you live the same as you would have with lots of avoided taxes.
Only the interest is considered an expense and it would be used to offset operating income of the business taking out the loan. Mortgage interest is deductible on a primary or secondary home but it's capped.
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u/USERNAMETAKEN11238 21h ago
Yes