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mywittyname

He doesn't need a mortgage, it's just financially savvy to have one.

He avoids paying taxes on the sale of stocks to finance the home.

Mortgage interest is tax deductible.

His stocks will almost certainly yield more than the interest rate on the mortgage.

He's getting a sweetheart deal from the bank.

For him, selling stock is a PITA because he has special class of stock that grant him voting rights far beyond what a normal share is worth. These special shares are granted to him by the board of directors. So selling 1 share means losing like 1000 votes (they convert back to 1:1 upon sale), meaning he needs to be careful when liquidating assets. By waiting five years, he can use vested options to pay the mortgage, rather than selling his special class stock.

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"Mortgage interest is tax deductible."

In practice, not for zuck.

1. Only the interest on the first 1 million is deductible. 2. The income phaseout probably also hits him hard

With the net worth equal to the GDP of a sizable country, does he need to worry about saving a few thousand here or there?

Also, free country and all, taking advantage of that special rate is still rather unsettling.

It's all about the special stock since he does not want to part with it. That is how he maintains control of Facebook.

>He avoids paying taxes on the sale of stocks to finance the home.

Can you elaborate on that?

Like-kind exchange? Not exactly sure what the parent was referring to.

https://en.wikipedia.org/wiki/Like-kind_exchange

If you want to buy a million dollar home using shares, you have to liquidate them and pay capital gains. By getting a mortgage you lower the amount of income you 'realize' on a year-to-year basis, lowering your taxable income. There are details on capital gains vs income taxes, etc, but in general I think the point was that the less income you realize in a given year, the less taxes you'll pay.

"If you want to buy a million dollar home using shares, you have to liquidate them and pay capital gains. "

Just to note: you don't :) In fact, if you wanted to pay all cash, and had enough shares, you'd generally take out a portfolio loan against the shares at some very low interest rate (probably not lower than current mortgage rates however) rather than sell the shares at all.

Whether this is better/worse than a mortgage depends on various things.

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