Unrealized capital gains tax

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The IRS does not impose taxes on unrealized capital gains1. 

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This implies that until the asset is sold, the owner of stocks or property that improves in value does not have to pay taxes on the increase. 

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Only when capital gains are realised, which requires selling the asset, are they subject to tax1.

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The household's effective tax rate is 12 percent when unrealized capital gains are included in income, which is lower than the suggested minimum tax rate of 20 percent.

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Unrealized capital gains only apply to equities, right?

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Now, individuals who are subject to a tax on unrealized gains are not limited to those who own illiquid assets; it would also apply to those who have significant holdings of publicly traded securities. 

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Unrealized capital gains tax

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