zlacker

> This is not much different from any interest bearing account. Should it be that you have to take all your money out of savings and ensure you earn nothing from it if you intend to offer it as collateral on a loan?

The difference is taxes. Interest on a savings account used as collateral is still taxed. Gains used as collateral in a loan are not taxed.

The parent poster is suggesting this loophole be closed - that the practice either be disallowed or considered realizing the gains for tax purposes.