paper loss

(redirected from Unrealized Capital Losses)
Also found in: Dictionary, Thesaurus.
Related to Unrealized Capital Losses: Unrealized Capital Gains

Paper Loss

A loss on an investment that has not yet been realized. That is, a paper loss occurs when the current price of a security which is still owned by the holder is lower than the price the holder paid for it. As a result, it is possible that the paper loss might be erased if the price increases again. A paper loss represents a decrease in one's net worth, but it may or may not affect one's lifestyle. See also: Paper profit.

paper loss

Paper profit (or loss).

If you own an asset that increases in value, any increase in value is a paper profit, or unrealized gain. If you sell the asset for more than you paid to buy it, your paper profit becomes an actual profit, or realized gain.

The same relationship applies if the asset has lost value. You have a paper loss until you sell, when it becomes a realized loss.

You owe no capital gains tax on a paper profit, though you use the paper value when calculating gains or losses in your investment portfolio, for example. The risk with a paper profit is that it may disappear before you realize it. On the other hand, you may postpone selling because you expect the value to increase further.

References in periodicals archive ?
The big change was in unrealized capital losses, totaling $18.
Unrealized capital losses, along with capital and surplus paid out (mainly stockholder dividends), offset net income and reduce policyholder surplus for 1999.
Partially offsetting these positive rating factors are Cherokee's highly elevated common stock leverage, which exposes the company to the vagaries of the equity markets, as evidenced in 2008 when it reported significant realized and unrealized capital losses, as well as its business concentration in the historically competitive commercial trucking segment.
The rating actions reflect Newport's weakened overall capitalization, poor operating performance and the combined impact of unrealized capital losses and stockholder dividends, which has reduced policyholder surplus over the recent five-year period.
Factors contributing to this result include increased frequency and severity of catastrophe losses and unrealized capital losses in recent years.
The company has not experienced realized or unrealized capital losses over the past five years.
2 billion in unrealized capital losses and $647 million in realized capital losses due primarily to unfavorable equity market conditions.
7 billion in unrealized capital losses, which were driven by a decline in the value of its unaffiliated stock portfolio due to unfavorable equity market conditions.
Although the Fund realized certain capital gains during the year, it was able to avoid capital gains taxes by offsetting those gains against previously unrealized capital losses.
4% in 2008 due to realized and unrealized capital losses.
The decline is primarily attributed to an extraordinary dividend of $100 million to its parent in 2008, reflective of TARIC's established dividend policy, and unrealized capital losses.
However, Pekin Life's net gains from operations have remained positive in each of the past five years; although, capital and surplus funds declined in 2008 due to realized and unrealized capital losses and increasing dividend payments.