The document discusses how asset values declining below liability values can lead to insolvency due to taxes. It explains that equity equals assets minus liabilities, so if assets are less than liabilities, insolvency occurs. It also states that housing is considered a liquid asset, so declining home prices can cause negative equity if the value drops below mortgage liabilities. The document concludes that when asset values depreciate or markets decline, tax liabilities on those assets may be higher than in previous years, which can lead to total liabilities exceeding total assets and resulting in insolvency.

1. 2/21/17, 7:46 PMCAPITAL MARKETS ASSETS TO EQUITY & THE UNSOLVED BALANCE OT TAX LIABILITIES | Alan Dixon ~ PathosCrescendo | Pulse | LinkedIn
Page 1 of 2https://www.linkedin.com/pulse/capital-markets-assets-equity-unsolved-balance-ot-tax-alan-dixon
CAPITAL MARKETS ASSETS TO EQUITY &
THE UNSOLVED BALANCE OT TAX
LIABILITIES
Published on April 12, 2016
In pureform equity equals assets minus liabilities. Thus when your assets are less than
the liabilities you hold you have insolvency. Furthermore homes are like liquid assets or
currency. Therefore when balancing a budget or liabilities relative to liquid assets,
when there is an over speculation on the asset market, whether houses or any other
durable security, the affect is housing or asset prices rise. Thus the effect in turn is when
there is a market correction, housing or asset prices collapse, therefore liabilities are
more than that of an individual's total asset's values. Thus to prevent systemic risk the
solution is to maintain additional capital savings or trusts or escrow accounts.
Thus furthermore, the effect, without capital currency savings or treasury insurance,
when securities markets collapse or rather the consequences of when stock or housing
markets collapse, is less total asset values in comparison to liabilities, hence negative
equity; whether it be in your home or due to the value of ones net liquid assets.
Now because ones home or personal or total equity, is less than the equity or estate
taxes in previous years the effect is more tax liability for future years.
Thus furthermore, when this occurs with house mortgages & general insurance
securities for example, the taxes in comparison to previous years with respect to the
current years' & future tax year's or rather the net outflow of cash on liabilities in
relation to the after shock of a stock or mortgage or home markets collapse or simply
a securities market collapse as it pertains to derivate securities is more than that of
ones current equity or the value in ones home or the value of ones total assets, thus the
consequence is insolvency; due to a higher tax precedence incurrence.
Simply, on a finer point when assets depreciate or when markets collapse in relation to
equity, tax liabilities on assets are more than that of the previous year's values, therefore
liabilities in comparison to total liquid assets equals a negative total equity, thus
insolvency.
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Alan Dixon ~ PathosCrescendo
Independent Marketing Director DECA Inc, VUBS LLC, W…
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2. 2/21/17, 7:46 PMCAPITAL MARKETS ASSETS TO EQUITY & THE UNSOLVED BALANCE OT TAX LIABILITIES | Alan Dixon ~ PathosCrescendo | Pulse | LinkedIn
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Of which is why is so important to account for asset depreciation and market collapses
when filing taxes.
~PATHOS CRESCENOD
~ALAN DIXON
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