Looking to access liquidity without selling your investments?
By borrowing against appreciated assets (real estate, investment portfolio, etc), you can unlock cash tax-free, keep your portfolio compounding, and plan around capital gains instead of triggering them.
For example, consider an investor holding stock worth $1,000,000 that was originally purchased for $200,000. Selling it outright would trigger capital gains tax on the $800,000 gain. Instead, borrowing against the stock as collateral provides access to cash without selling, and without triggering that tax bill, since loan proceeds are not treated as taxable income.
Lenders typically advance a portion of a portfolio’s market value, often in the range of 50 to 70 percent, through vehicles such as securities-based lines of credit. Interest rates on these loans are generally lower than the capital gains tax rate an investor would otherwise pay on a sale, though rates and terms vary by lender and by the assets used as collateral.
It’s the foundation of the “buy, borrow, die” framework, it’s a strategy that’s sophisticated, but surprisingly practical.
At Liberty One Wealth Advisors, we believe in clear, thorough planning to preserve, sustain, and grow our clients’ wealth over a long-term time period. Whether you’re planning for the future or need assistance with current financial challenges, we’re ready to help. Schedule a complimentary Q&A with one of our team members today: https://libertyonewealth.com/answers/
When appreciated assets are passed to heirs rather than sold during the investor’s lifetime, those assets typically receive a stepped-up basis, meaning their value is reset to the market price at the time of inheritance. This can significantly reduce or eliminate the capital gains tax that would otherwise apply if the heir later sells the asset.
**Disclosure:** The information provided is for educational and informational purposes only and should not be construed as personalized financial advice, an offer to buy or sell securities, or a recommendation of any strategy. Investment and tax laws can change, and the concepts discussed may not apply to every individual situation. Liberty One Wealth Advisors and its affiliates do not guarantee the accuracy or completeness of any statements, qualitative or numerical, contained herein. Nothing in this communication is intended to constitute legal or tax advice. Readers should consult with a qualified attorney or tax professional regarding their specific circumstances before making any decisions. All investments involve risk, including the potential loss of principal, and no strategy ensures success or eliminates risk.
