I Asked ChatGPT What Tax Moves Billionaires Make That Regular People Can't
It’s good to be a billionaire any time of year. But it can be especially advantageous during tax season. Not only do you get the conventional perks of being super-rich, like the freedom to take an early island vacation (or maybe buy the whole island), you can also take advantage of certain tax strategies that are largely out of reach for regular people.
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As someone who can only look at Jeff Bezos’ billions with a wistful gleam in her eye, I decided to ask ChatGPT what these tax moves look like. What can Taylor Swift do during tax time that I can’t (other than sing and dance in high heels)? The AI had some surprisingly blunt answers.
1. Living Off Loans Instead of Income
ChatGPT was clear that, instead of selling assets and triggering taxes, billionaires often borrow against those assets. In other words, they use their wealth as collateral rather than cashing it out. What does that look like in practice? The AI broke it down:
“Someone like Elon Musk or Jeff Bezos holds billions in stock. They take out loans using that stock as collateral,” it wrote. “The result is that they get cash without creating taxable income.”
That distinction matters because loans are not considered income by the IRS. Sure, regular people can borrow, but ChatGPT notes that “you need massive, stable assets,” and “interest rates and terms aren’t nearly as favorable.”
2. Using a Buy, Borrow, Die Strategy
OK, “buy, borrow, die” sounds very dramatic — or like the latest James Bond flick — but the AI has a simple explanation of what it calls “a cornerstone wealth strategy”:
Buy assets (such as stocks or real estate)
Borrow against them (creating tax-free cash)
Die so heirs inherit assets at a stepped-up basis
“The step-up in basis resets the asset’s value for tax purposes,” it wrote. “So capital gains taxes on decades of growth can disappear.”
This step-up in basis is a real feature of the U.S. tax code, though it has been debated politically for years. For billionaires with highly appreciated assets, it can mean that enormous paper gains are never taxed at all.
3. Using Complex Trusts
ChatGPT said that ultrawealthy families often rely on advanced estate-planning tools, such as grantor retained annuity trusts (GRATs) and dynasty trusts, to help minimize estate taxes or pass wealth across generations.
“Regular people can use trusts, too, but these structures require teams of lawyers and millions to make them worthwhile,” it wrote.
4. Turning Income Into Capital Gains
Another smart tax move billionaires make? They structure their earnings to be taxed at lower rates.
The AI explained that because long-term capital gains are generally taxed at lower rates than ordinary income, wealthy individuals often take compensation in stock or equity rather than a traditional salary. Instead of earning wages, they increase ownership in a company, such as shares in Amazon.
Unfortunately, since your landlord won't accept equity in a company as rent, you’ll likely remain reliant on a paycheck that’s taxed as ordinary income.
5. Massive Tax-Loss Harvesting
Though you might imagine that billionaires never have losing investments, they do — and they sometimes use those losses strategically. They can sell losing investments to offset gains elsewhere in their portfolios.
ChatGPT described how this works:
“If they lose $100M in one investment, they can offset $100M in gains elsewhere,” it wrote. “They often rebalance portfolios constantly to optimize taxes.”
Can regular investors do this? Yes, in theory. But billionaires have an advantage because they own far more assets and have more flexibility. They’re also better positioned to absorb — or even intentionally create — losses without jeopardizing their financial security.
6. Real Estate Depreciation Loopholes
ChatGPT said that real estate is a “tax gold mine” for billionaires for a few key reasons — most notably, their ability to deduct depreciation even when the property is increasing in value.
Those paper losses can sometimes be used to offset other income, depending on how the investments are structured and how actively the owner participates. This is an area where tax rules get especially complex and where wealthy investors often rely heavily on professional advisors.
7. Private Foundations and Donor-Advised Funds
While you might like to believe that billionaires make sizable donations and set up private organizations purely for social good, there can also be tax advantages.
“They donate to charitable entities they control to get immediate tax deductions and still influence how the money is used,” the AI wrote. “Some create foundations tied to their wealth (e.g., philanthropy structures associated with people like Bill Gates).”
The Bottom Line
Ah, billionaires. They are definitely not like the rest of us in many areas of life, including how they're taxed.
“The tax code favors asset ownership over wages and long-term investing over income earning,” said ChatGPT. “Billionaires structure their lives around that reality — most people don’t have the capital or flexibility to do the same.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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