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TOPIC: What's_your_delusion
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OK... if I understand it correctly (and I definitely need to read more), then it's that you deduct the interest from your personal income tax and the capital gains is taxed at the capital gains rate (provided it's a long-term capital gain).

If that's true, I agree that is crap - and the interest should simply offset the investment income. In the scenario you described, the investment/interest/capital gain should result in neither tax nor tax benefit.

Windermere FL
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The government will take care of us and keep us safe always :-D

Westerly RI
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btw all of these complications and sneakydoodles are completely moot with FairStress.... just throwing that out there....

Windermere FL
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"Borrow a million bucks to make an investment. Fully deduct $50k/year interest paid. Make capital gains from investment of $50k. In cash terms you're even; a wash. But you only get taxed on cap gains at a fraction of earned income rates, so you're ahead on taxes; a net savings."

Are you saying the $50k is not added to the basis cost of the $1 million investment? i.e. it cost you $1,050,000 to make an investment that you sold for $1,050,000?

Imma gonna hafta look more closely at Pub 550....

Windermere FL
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I guess one could be deluded that you shouldn't have to pay for a house to live in, or it shouldn't cost anything to rear children. But if you want a home and a family, that's what you have to do.

Thinking you can live in a great country and an advancing civilization, and that your wealth is entirely of your own making, rather than enabled by your society -- well, that's not realistic at all.

Hobnobbing with others who think the same stoopid shit -- anti-gravity, time travel, tax-free opulence -- doesn't make it a bit more plausible. I guess it makes it more likely a society will attempt such an experiment, if enough people buy into it. But that's hopefully not gonna happen.

Hendersonville NC
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"deduction for investment interest paid"

Borrow a million bucks to make an investment. Fully deduct $50k/year interest paid. Make capital gains from investment of $50k. In cash terms you're even; a wash. But you only get taxed on cap gains at a fraction of earned income rates, so you're ahead on taxes; a net savings.

New Orleans LA
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""Fortune" i.e. luck has nothing to do with it."

Sometimes it does. A friend of mine won the birth lottery and took over the family business. He's brighter than average but not exactly brilliant. He takes off 2-3 afternoons per week to golf. He pays a manager (probably middle five-figure money), and my friend lives pretty damn well off the good fortune of having a wealthy daddy who handed him stuff on a platter. Don't get me wrong, I don't begrudge him anything. But he definitely lives off his good fortune.

New Orleans LA
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"The ability to take a 100% dollar-for-dollar deduction for investment interest paid, while paying tax on only a fraction of investment capital gains, is another thing. "

What?

Windermere FL
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" have difficulty working up a lot of tears for anyone unfortunate enough to make $450,000 AGI per year"

"Fortune" i.e. luck has nothing to do with it.

Who asked you to?

Windermere FL
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Oh, a couple of other things, that I've mentioned before: all of these IRS statistics are based on AGI, which can be a bit misleading. Paper losses and things like depreciation can (and usually do) make the AGI figure on a return lower (sometimes MUCH lower) than actual cash income. 

Other things like interest on tax-free GO bonds also don't get included in AGI, although it's very real income. The ability to take a 100% dollar-for-dollar deduction for investment interest paid, while paying tax on only a fraction of investment capital gains, is another thing. 

So for purposes of IRS statistics, it's entirely possible for someone to show only a little bit of AGI, while in fact that person could have received literally millions in actual income. That kind of thing skews the statistics. 

New Orleans LA
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TOPIC: What's your delusion
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