If investments didn't grow at a faster rate than interest, why would anyone ever invest money at all instead of putting into a savings account? I don't know why it''s hard to imagine that a large loan with a relatively low interest rate might be able to be invested for more than enough profits to pay off the taxes and the loan with some to spare
replyYes, and that's fine. That's still paying taxes…
replyHow does it work if the loan defaults and those assets were used as collateral?
replyI'm not a tax lawyer, but I think if you default on a loan, the collateral changes hands, which is a taxable event for you as if you sold the asset, at whatever value the unpaid portion of the loan was. So you pay tax.
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