> If you aren't actually reinvesting capital, pay your damn taxes. Don't be an asshole.

Why? So my government has more missiles to blow up children? No thanks.

Most tax money goes to social programs. Especially at the state and local level.

Pretty good overview of how/why these deductions reduce your taxable income. Couple of things to note.

Depreciation is recaptured if you sell an asset for more than its depreciated basis. People sometimes get into trouble with this if they rapidly depreciate real estate and then sell it. Even if you sell for less than your purchase price it is possible to owe taxes.

You also aren't going to be able to pay no taxes since you do need to realize some income to pay for mortgage/rent, food, transportation, etc. I guess if you had assets you could borrow against it would be possible to pay for these using the loan proceeds (which are not taxable).

The thing I don't understand with these loan arguments is: don't you eventually need to pay taxes in the income you use to repay the loan? It seems to me that folks who take out such loans are just kicking the can down the road.

When the cash flow from the assets exceeds interest expense, you've cashed out the assets without incurring tax on your appreciated position and you can afford to pay the interest. As for principal, debt is largely not paid back these days, especially large bespoke debt secured by liquid and well-defined assets. The debt holders (lenders) get paid back after death of the borrower or they continue rolling the position and collecting their return (interest income). The only question in the lender's mind is how much leverage to grant on the underlying assets, e.g. blue chip stocks, and what to do in a liquidity crunch when rolling.

There are a bunch of strategies here, but one people oft repeat is the "buy, borrow, die" approach. Where, they are kicking the can down the road, but the magic happens at the die step. When the borrower dies:

Your heirs inherit your stocks, with their cost basis reset to the current price. This means that they have zero appreciation of your purchase of $RIVN at $67, despite it being at $420. They can then sell the shares, to pay the loans, and not owe capital gains, because there are no gains. Additionally, at this step cash can be extracted for no gains as well if desired.

So you avoid taxes while alive by taking loans (not income), avoiding capital gains (never selling), and then gains evaporate through a stepped up basis. There are some exceptions here - estate taxes, etc with ways around them like trusts, but this is the general mechanism.

Its worth noting though, that its not ironclad. In a significant downturn you can be forced to liquidate and it will hurt (see the news on Musk right after X purchase). Additionally, while people talk about this as being super popular, realize that in practice people who take advantage of these strategies also still have millions in cash flow, so its not a true borrow only $0 tax lifestyle, they will use already taxed money to manage them as well.

Minor nitpick. The step up in basis actually happens when you die (not when your heirs receive the assets), and your estate has to pay off creditors before distributing assets. So the debt is paid off first, then your heirs get whatever is left over. Net result is the same though.

I'm familiar with this strategy but there's one thing about it that I don't understand: After death, the loans are an estate liability, right? Doesn't the estate need to be settled before heirs get their inheritance? If i had an outstanding $1MM loan, wouldn't the estate need to liquidate some of that $RIVN at the $67 basis in order to pay the loan? and then whatever $RIVN was left over would go to the heirs at a stepped-up basis?

I conflated the two, since it all happens pretty quickly, but the estate is actually the recipient of the updated basis. So the estate sells @ current price, pays the negligible difference on gains from appreciation while the estate settles, if any happened, and then passes out the rest.

The step up in basis happens when you die, so the estate has no capital gain. Then the debts are paid, then the heirs get whatever they're supposed to get.

Ok thank you. That was the key to my misunderstanding.

The strategy is called "Buy, Borrow, Die"

https://www.theatlantic.com/economy/archive/2025/03/tax-loop... (viewable by disabling JS)

What if I live for, say, decades before dying. Surely the lender expects some some amount of repayment before then.

You do. I think these loans are generally used for short term liquidity. For example if you want to buy a new house before selling your old one. You'd get a loan against your assets, buy the home with the loan proceeds, sell your old home and pay off the loan.

If your assets are growing faster than the interest it would also be possible to payoff the loan with a new (larger) loan, so you are still kicking the can down the road but eventually you would die and never need to pay the taxes while you were alive. I doubt this is done that often in practice, but who knows.

As mentioned in the article, death (and subsequent inheritance), solves this problem. Once you're dead, your tax situation changes significantly, and selling your assets to settle your debts is subject to estate taxes, not capital gains.

Sometimes its about the layers.

I.e. what kinds of loans can be tax deductible? To be clear theres decent effort into this, you can't just do a cash-out refi on a home, but loopholes exist for those who find it worth the effort.

A margin loan typically does not require any payments at all other than interest. Many loans are like this. Amortization for principal repayment is usually something you only find in personal or real estate loans

You repay with another loan. Repeat multiple times. And then you die.

This is the strategy that people follow.

I'm not sure to understand how deferring taxes is a better deal than paying it here and now.

Since I'm not a financial adviser, someone asked me take on which 4k projector to buy last Xmas.

I explained that the tech has improved so much lately, they've become somewhat affordable, I recommended a model and pointed ou that he would certainly get a better device next Xmas, for half the price. I thought he would follow suit given his budget was a bit below the retail price. That would just wait.

His response was he would rather go ahead and up the budget a few hundred dollars to get it right away. That projectors will surely get much better by next year, but that he, certainly, will not.

This is touched on briefly, the number one reason is that if you can keep deferring your taxes indefinitely then you never have to pay them. Your tax burden is wiped away on death so not only does it not matter to you but your heirs won't be affected either.

Deferring taxes is essentially an interest-free loan from the government to you. You can take that money, invest it, and then keep most of the earnings when you eventually pay the taxes.

There are also some loopholes where capital gains taxes deferred until after death just don't get paid at all. This is the "step-up basis" where your inheritors get to reset the basis of capital assets and neither you nor they has to pay taxes on the capital gain.

This is what they call "buy borrow die" or some such. Buy an asset, borrow against it, die to reset the basis. Your estate will still have to repay the loans, but... that one part I don't really understand. Do they just refinance, taking a new loan against the newly valued asset?

This all seems to benefit from low interest rates. Was it a thing in the 90's? Or even the 80s when rates were much higher?

Yes, and when you do pay it's a lower "real" tax (due to inflation)

In addition to the other reasons given: Sometimes it also makes sense if your income is lumpy and you e.g. expect to have years where your income will fall into a lower tax band. It then can pay to suddenly recognise more income to take out as much as you can within the lower band.

Not sure I understand your example. If you always wait for the new version of a product to release the following year then you are never going to buy anything.

but you'd wait only long enough for a version that's good enough, not forever.

Because of cost basis step up at death, you can just defer forever.

Suppose I defer $1 million in taxes until after I'm dead, and my estate conveniently does not have $1 million in assets left. What happens?

In the meantime, I gave all the assets to my children while I was alive

The answer is nothing. The government eats the loss.

The projector prices are a scam except for Christie and Barco

Is this advice from Wesley Snipes?

Haha that made me laugh

How to Not Pay Any Taxes: don’t be American.

Living tax free is easy enough for everyone except Americans.

Where are you living that you don't have to pay taxes?

That’s the trick. Don’t live anywhere. Every other country taxes based on residency rather than citizenship. If you’re not a U.S. citizen you can just wander around the world living tax free regardless of your income. Don’t stay anywhere long enough to become a tax resident.

Funny thing, states like CA, TX, TN going after folks who thought it good idea to register vehicles in MN and not pay their own local state sales taxes...

Please consult a real tax lawyer before even following such advice...

Why? They have skin in the game such losing their license if they do something wrong and illegal...

That's a great deal more complicated than our TFSA and RSP programmes, here in Canada.

RRSP first time home buyer credits can get a bit complicated though. Also, a fun fact - dual US-Canadian citizens can't (effectively) use TFSAs because the US considers appreciation in a TFSA to be taxable income.

> Defer US taxes by reinvesting your taxable income into the economy as business expenses, depreciating assets, etc.

Be really careful when doing this. Make sure you have a great accountant - if you go more than a few years without turning a measurable profit, your risk of being audited apparently goes up. My accountant personally cautioned me about this since my business has been in an R&D phase for 5 years so we've been showing a small loss every year. The last thing you want is for the IRS to decide you've been cheating on your taxes.

This is true for most businesses (they will reclassify it as a "hobby" where expenses aren't deductible, though you can fight that in tax court or real court if you want to) - but for rental properties you can go for decades with no profits (because of depreciation).

Can you elaborate? As a business owner in the U.S. I can opt to reinvest all revenue back into the business, thus would show zero net profit but (presumably) increase my company’s value. (And remember there are other taxes and fees paid to various governments, not just tax on income/profit, so it’s not typically like nothing gets paid.)

You can't reclassify profit as reinvestment to show zero net profit. (If you could every business would have an internal hedge fund or private equity business and would show zero net profit).

>As a business owner in the U.S. I can opt to reinvest all revenue back into the business,

Not entirely, no. Any of those reinvestments that count as capital expenditures aren't immediately deductible, but only on a throttled schedule, which is why the concept of depreciation exists in tax law:

https://news.ycombinator.com/item?id=15061439

As a business owner, if you provide labor to the business, you have to pay yourself a salary.

This is why many people make minimun wage - they get a salary but they use the business profits to live on. See your accountant for all the fine print before doing this.

The point is creating failed businesses is legal and tax deductible.

tax penalities are low interest loans, so you can invest the money and pay the IRS the penalties at the end of the year.

Or, just pay your taxes. We collectively benefit from them.

Is there really any correlation between tax revenue and spending at the federal level anymore? It seems the U.S. government is willing to spend at huge deficit levels. If everyone stopped paying federal taxes I suspect nothing would change.

What would change is the government would need to greatly increase their debt. In 2025 the government got about $5.23 trillion in tax revenue and spent about $7 trillion. So most of the government spending is financed by taxes. Remove that and the rate of debt quadruples (and by extension inflation).

Magical thinking! You may as well recommend the government prints more money and give it to everybody...

In FY2025, the U.S. federal deficit was $1.78 trillion, with total revenue at $5.23 trillion, so clearly it's a majority of revenue.

It is a good thing for life, money and health, to be clear how much is enough. In money frugality always wins. These billionaires they're very miserable. Their faces show stress, worry and animosity. People say money does bring happiness. It is BS. It holds true only if there is health.

Highly recommend: https://www.youtube.com/@taxleverage

This feels like a great way to get audited by the IRS. It does not feel like sound advice.

So the advice here is (from my understanding, not a tax lawyer) sound, but it is "unsound-adjacent" -- so a lot of people will start from this basic understanding and then go off into crazytown.

So like influencers get to hear other influencers explaining this "you can reinvest your profits and then you won't have profits" type of advice... but then they will put it right next to unsound advice about "by the way, a great way is to invest in a "business" trip to Greece to sail the Mediterranean, it is "team-building" between you and your spouse and kids who are all employees of your little influencer company, oh by the way you should buy fancy watches so that you can show them off in your videos, and get a very expensive hairstylist to do your hair -- as long as you make a video about it!"

And it's like, no, the tax courts actually have procedures they follow to determine if those things are personal expenses or business expenses and 90% of the advice that you hear here are some form of tax fraud.

But from the point of view of a company, as the tax year comes to an end you hopefully have extra money left in the bank, now you can either use it to buy things that the company needs and thus grow the company, or you can hold onto it where if you're a C-corp the government will take 21% of the year-on-year delta, or you can pay it back to the shareholders as a dividend and they pay 15% capital gains tax on it. (And of course you don't have to dump the whole account into just one bucket, you can choose how much goes into each of the three.) And when it gives the advice "pssst, you should probably reinvest most of it," that's a standard practice explicitly sanctioned by the government.

All of these techniques are entirely routine for the average company with even a semi decent accountant, and only marginally increase the chance of an audit.

You do have to be sure you follow the rules and avoid various gotchas that other people in this section have pointed out, but otherwise it is entirely legal and routine.

I don't know if you're right or wrong, but it is an incredibly common tactic and done all the time by many businesses and people. There are of course ways to do this that are less noticeable by the IRS (as acknowledged in the article) and it doesn't seem like they have the capacity to investigate and audit the vast amount of this practice. My understanding is they are typically focused on fraud and/or folks simply not filing.

I'm getting very strong sarcastic vibes from the article.

Nah, the maximally sarcastic advice for tax avoidance is "become president" then you can just refuse to prosecute yourself for tax evasion and sue yourself for a ridiculous sum of money when someone leaks your tax avoidance.

It seems to me that I'm running into more people who just don't file their taxes. They wait for the IRS to send them a letter saying how much they owe, and they just pay that.

I can't figure out the thought process of someone who finds this sensible. Maybe there isn't one.

I’ve never heard of anyone doing this, but now I kind of wish everyone did. Maybe it would force the IRS to just give us a bill instead of having us try our best to calculate what we owe, submitting that, and then hoping that we don’t get an angry letter when the IRS calculates it themselves and their answer doesn’t jive with ours.

I guess the accuracy of such solutions vary by jurisdiction; I just received my tax return for 2025 in Norway.

The sum owed I had calculated at the end of 2025 was less than 2% off from the sum our IRS equivalent came up with.

Their sum was the most favorable to me, though - they had adjusted a deduction I qualified for last year which I had missed.

This level of accuracy is down to our IRS knowing just about all there is to know about our income, assets, debts &c of course - oh, and on there being fewer loopholes in our tax code...

That seems like a terrible idea. A good tax accountant will help you find ways to lower tax burden and save money. The IRS has no such incentive, and will probably just tax you at the standard rates for your gross income.

Well, frankly, that's exactly how it should work.