> The taxable value is exactly how much you borrowed against it!
I'm not sure what you mean by that term, since we're not talking about property taxes. With respect to capital-gains tax, the amount you liquidate is not the same as the gains being taxed.
> is exactly how much you borrowed
You're mistaken, the tax depends on the history of the item being liquidated. Suppose you need to repay a loan, and you have two options:
1. Sell 1 share of Acme stock for $20, that you originally bought for $20. Your $0 gain leads to $0 tax. Net cash: $20.
2. Sell 1 share of Acme stock for $20, that you originally bought for $5. Your $15 gain leads to $3 tax. Net cash: $17.
It's obvious you'd prefer the first one, right? Even though they're stocks from the same company being sold on the same day for the same market-price to service the same debt.
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> The taxable value is exactly how much you borrowed against it!
I'm not sure what you mean by that term, since we're not talking about property taxes. With respect to capital-gains tax, the amount you liquidate is not the same as the gains being taxed.
> is exactly how much you borrowed
You're mistaken, the tax depends on the history of the item being liquidated. Suppose you need to repay a loan, and you have two options:
1. Sell 1 share of Acme stock for $20, that you originally bought for $20. Your $0 gain leads to $0 tax. Net cash: $20.
2. Sell 1 share of Acme stock for $20, that you originally bought for $5. Your $15 gain leads to $3 tax. Net cash: $17.
It's obvious you'd prefer the first one, right? Even though they're stocks from the same company being sold on the same day for the same market-price to service the same debt.