Some of the most powerful tax rules only reveal themselves over decades.
In the US, assets can receive a step-up in basis when passed on death. This means that unrealized gains during a lifetime can effectively disappear for tax purposes. An asset bought for $1 million and worth $10 million at death can be transferred as if it were acquired at $10 million.
When combined with a strategy of holding assets and borrowing against them rather than selling, the implications are significant. Gains are deferred indefinitely during life, liquidity is accessed without triggering tax, and on death, the embedded gain may be reset. It is a long-term strategy. But at this level, time is part of the toolkit.
"For several reasons, an individual with liquidity needs should consider whether it may be more efficient to borrow against these assets instead of selling them and paying capital gains tax. By holding onto assets until death, unrealized capital gains are wiped away, allowing heirs to cash in on an inheritance without any income tax consequences. Additionally, borrowers pay no income tax on loan proceeds while their assets continue to grow. With a low enough interest rate coupled with the right investment strategy, capital appreciation may exceed the interest payments, resulting in a win on many fronts. - Sean Weissbart, Co-Chair of the Tax, Benefits, And Private Client Practice Group at Blank Rome
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"Tax Secrets of the Ultra Rich," was published in Mr FamilyOffice on April 24, 2026.