Liquidity for Tax Season
Did you know that you may be able to finance the full payment of your tax liability through a loan? The Internal Revenue Service (IRS) explains this strategy on their IRS website.

A securities based loan may create the liquidity you need to finance your tax liability without liquidating assets, diminishing cash reserves or disrupting your investment strategy. Eligible securities, including concentrated or restricted positions, held in a Morgan Stanley brokerage account may be used as collateral for the loan or line of credit.

Key benefits of securities based lending through Morgan Stanley include:
  • Competitive Rates
  • Flexibility
  • Convenience
The same securities based loan that you establish to finance your tax payment may also meet a variety of other permissible needs, such as expanding your business, purchasing luxury items or funding a bridge loan.

Before you liquidate assets to pay your tax payment, consider the potential costs of doing so – such as taxes on capital gains, the potential loss of future growth or an imbalance in your portfolio's overall asset allocation. There are risks associated with using your assets as collateral in a securities based loan, including possible margin calls on short notice. See below for details.

Speak with your Financial Advisor or Private Wealth Advisor to learn about securities based loans and potential liquidity strategies for your individual tax payment needs. If you do not have an Advisor, visit to find one near you.

CRC 820985 2/14

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Securities Based Lending Tax Flyer

Financing and Liquidity Strategies Brochure

Morgan Stanley Smith Barney LLC (Morgan Stanley), its affiliates, employees and Morgan Stanley Financial Advisors are not in the business of providing tax or legal advice, and these materials and any statements contained herein should not be construed as tax or legal advice. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Individuals should consult their personal tax advisor or attorney for matters involving taxation and tax planning and their attorney for matters involving personal trusts and estate planning.

Securities Based Lending Risks: Borrowing against securities may not be suitable for everyone. Please be aware that securities based loans involve a high degree of risk and that market conditions can magnify any potential for loss. Most importantly, please understand that: (1) Sufficient collateral must be maintained to support your loan(s) and to take future advances; (2) You may have to deposit additional cash or eligible securities on short notice; (3) Some or all of your securities may be sold without prior notice in order to maintain account equity at required collateral maintenance levels. You will not be entitled to choose the securities that will be sold. These actions may interrupt your long-term investment strategy and may result in adverse tax consequences or in additional fees being assessed; (4) Morgan Stanley Bank, N.A., Morgan Stanley Private Bank, National Association, or Morgan Stanley Smith Barney LLC (collectively referred to as "Morgan Stanley") reserves the right not to fund any advance request due to insufficient collateral or for any other reason except for any portion of a securities based loan that is identified as a committed facility; (5) Morgan Stanley reserves the right to increase your collateral maintenance requirements at any time without notice; and (6) Morgan Stanley reserves the right to call your securities based loan at any time and for any reason.

Morgan Stanley Smith Barney LLC (Morgan Stanley) is a registered Broker/Dealer, a member SIPC, and not a bank. Where appropriate, Morgan Stanley has entered into arrangements with banks and other third parties to assist in offering certain banking related products and services. Unless specifically disclosed in writing, investments and services offered through Morgan Stanley are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, a bank and involve investment risks, including possible loss of principal amount invested.