Recent stories stemming from the ProPublica disclosure about billionaires and effective tax rates describes a strategy where billionaires borrow eye-popping sums of money, using their stock equity as collateral. The article lists Larry Ellison with a nearly $10B line-of-credit secured by Oracle stock, Elon Musk pledged $57B worth of stock for personal loans, and Carl Icahn with "only" $1.2B in loans from Bank of America (among other loans).
I understand how taking a loan avoids selling shares and triggering taxes on capital gains. What I don't understand is how these loan positions get closed out. Are they merely deferring taxes for some number of years, eventually selling assets to pay off the loans and paying capital gains at that point? Or do these loans just sit on the books until the the borrower dies and are paid out of the estate? Are they structured in such a way that the loans are paid by heirs who benefit from a stepped-up basis and thus incur no capital gains?