Ed McCaffery

Buy, Borrow, Die: how the ultra-rich pay zero tax forever

Aaron explains the strategy he traced to USC professor Ed McCaffery: buy appreciating assets, borrow against them tax-free to fund your lifestyle, then die and pass the assets to heirs at a stepped-up basis so the gains are never taxed. Larry Ellison is cited running a $10B line of credit against Oracle stock instead of taking income.

“That's right. So this is how like your ultimate tech bro, Larry Ellison, does it. He's the CEO of, I believe, a small company called Oracle, right? So he has a $10 billion line of credit. And that's why all these CEOs who say, oh, I only take $1 in annual income. That's just a trick the rich play to come across like, oh, I'm just like you.”

Steal thisHold appreciating assets, borrow against them instead of selling, and let heirs inherit at a stepped-up basis to wipe out the capital-gains tax.