401ks on the table. What a fucking disaster this is going to be. https://www.reuters.com/article/us-usa-biden-yellen-idUSKBN29O1WX
clarify this for me, "unrealized capital gains". investment that hasn't been cashed in yet? Like, if I'm holding my Tesla stock, I can get taxed on what I haven't sold?
https://www.investopedia.com/terms/u/unrealizedgain.asp What Is an Unrealized Gain? An unrealized gain is a potential profit that exists on paper, resulting from an investment. It is an increase in the value of an asset that has yet to be sold for cash, such as a stock position that has increased in value but still remains open. A gain becomes realized once the position is sold for a profit. It is possible that if an unrealized gain is not sold in time that the potential profit could be erased if the position loses its profit value before it is sold. Key Takeaways An unrealized gain is a theoretical profit that exists on paper, resulting from an investment that has not yet been sold for cash. Unrealized gains are recorded on the financial statements differently depending on the type of security, whether they are held-for-trading, held-to-maturity, or available-for-sale. Gains do not affect taxes until the investment is sold and a realized gain is recognized. If an investment is held for longer than a year, the profit is taxed at the capital gains tax rate. An unrealized loss is the opposite of an unrealized gain where an investment has decreased in value but has not yet been sold. https://markets.businessinsider.com...ion-taxing-unrealized-gains-2021-1-1029986372 The Oaktree boss also weighed in on Janet Yellen - President-elect Joe Biden's pick for Treasury secretary - saying she would consider taxing investors' unrealized gains during her confirmation hearing this week. "That would hit sentiment," Marks told CNBC. "It would obviously make it less attractive to be an investor, all things being equal." Currently, US investors incur taxes on their capital gains when they sell an asset and realize their profits on it. The policy discourages them from cashing out and incentivizes them to invest for the long term. Taxing their gains before they're realized is "not a great idea," Marks said. "I don't think it's a practical plan and I don't know how you go out and tax everybody's assets every year at what is supposed to be their market value," he said. "What happens if you have a down year? You get a refund?"
I could probably look this up but let's talk about this further. So I get taxed on unrealized capital gains cause Tesla kicked ass last year. I pay tax and still hold on to the stock. This year, Space X rockets have a major malfunction, Ford electric mustang and truck blasts everyone's expectation, Musk has another on air episode that freaks investors out, and Tesla stock drops 50% from where it is today. My unrealized capital gains are not what they used to me. Do I get a write off from last year's tax? You know, like current capital gains and capital losses. I mean, they would be taxing a number on a piece of paper, not a dollar that I have. I really can't wrap my head around that right now.
yeah but that number changed year to year, in my scenario, for the worse. So how does that work? Does it even matter? Are unrealized capital gains taxed independently year after year as if it is not the same thing being held from the previous year?
