Quote:
Originally Posted by Angyale
Where someone paid $100 for an item, the owner can only sell it for $500 due to market conditions at the time is sale but the “book value” is $1000 so the seller can claim a capital loss? You can’t have one scenario without the other. So if there is an unrealized capital gain, couldn’t there be an unrealized capital loss as well?
Angyale
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That is another possible problem if the government were to pass a new "Mark to Market" tax law on some individual's and their investments/assets. Say you are subject to this tax law and buy something for $100 during the year. At the end of the year the item's value has jumped to $1,000, so you now have to report and pay the tax on your $900 gain. So you go to sell the asset to cover the tax due, but find out that since the prior year-end the value dropped down to $500, and you sell it for that. You still have to pay the tax on the prior year's $900 gain, but because of the sale, you've now created a $500 loss to report, but you have to wait to do that on next year's tax return. Ugh!