Typically physical assets e.g. gold are held as collateral for corporate loan. In case of default, the holder of the corporate loan (i.e. bank) can liquidate the collateral asset held to recover the principal and other expenses.
My question is what is the tax implication for such selling of collateral, assuming value of the collateral sold is enough for 100% recovery and/or partial recovery.
Do banks consider such tax implication to decide the amount of collateral held against such loan?
