alt Hacker News> One can’t spend any of the money until it becomes personal assets.
The oldest trick in the book is to use unrealized gains as collateral for loans - we even have banks specializing in this.
Oh, and the US has a law that erases the tax bill for dead people - you'd be stupid not to use this trick.
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>the US has a law that erases the tax bill for dead people
That is true, but there is a theory, applied very weakly, that supports this. The idea is that a decedent's estate is subject to a wealth tax on its fair market value, therefore to also subject the unrealized gains within the estate to income tax would be double taxation, which is to be avoided. The flaw is that the exemption from the estate tax is relatively high (something like $13,000K), so there would not be any double taxation is most cases, but it's treated that way nonetheless.
Would you also be open to paying taxes in your 401k yearly based on unrealized gains?
That defers the gains, but does not eliminate them. When the loan comes due, they have to sell assets to pay it back.