taxing unrealized gains

[Hank]

Geez, gonna be hard to mark to market for small closely held businesses. Pay unrealized gains every year on an ambulatory surgical center or imaging center? Fractional ownership in a strip mall or storage unit place?

What about a dentist who owns two or three offices or the family that owns a medium sized tow truck business? Woe unto farmers who may be land rich but cash poor.

This could accelerate the trend of trailer park owners in city locations selling out to make new upper middle class subdivisions (with fewer housing units) thereby exacerbating the shortage of affordable (unsubsidized) housing.

Sounds like a real boon to the tax accounting industry, but maybe not the taxpayer.

[Lithium]

Some interesting details and ramifications in the WSJ today. I won’t spend too much time on it since it is almost certainly DOA politically. Apparently if you hold “illiquid” assets like real estate that are difficult to value you can get away with just paying an interest charge rather than the gain every year. I think just about any other proposal, even eliminating the step up in basis at death, sounds better than a wealth tax.

[Random1]

I think the feasibility of this would be a logistical nightmare, but it would open up pandoras box for taxing unrealized gains for the average citizen. I dont think it would be too difficult for vanguard or fidelity to issue a statement at the end of the year to the government with my unrealized gains on it to be included on my taxes. I really don't know how Elon hold his stock , but I doubt he has paper shares sitting in a vault. So there should be some sort of fiduciary account which holds his stock and can send out a statement

[jhwkr542]

It's not going to happen. But I would assume you'd write off unrealized losses as well.

[STATscans]

So how would that work?

Biden is saying they will tax, 'wealth'?


How exactly would this happen?

Take Elon for example, they would tax his holding on TSLA at the end of the year? Say he had 100 billion January 1st in TSLA stocks and ending up with 200 billion December 31th, they would take 20% of the 100 billion? What if the stock price went down for the year? no tax? too bad for you? If they tax him Dec 31st and TSLA stock price drops Jan 1st of the, does the government not owe him anything?

If such a scheme by the government got voted in, couldn't the wealthy simply make the price of their stocks drop at the end of the year? Thus not owning much?

I will probably never have 100 million. And I see that there are about 5000 people in the US with that much wealth. But this is silly.