unrealized gain

Paper Gain

A gain on an investment that has not yet been realized. That is, a paper gain occurs when the current price of a security is higher than the price the holder paid for it, but the holder still owns the security. As a result, there is the possibility that the paper gain might be erased if the price goes back down. A paper gain represents an increase in one's net worth, but it may or may not affect one's lifestyle. See also: Paper loss.

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unrealized gain

The increased market value of an asset that is still being held compared with its cost of acquisition. Unrealized gains are not usually taxable. Also called paper gain, paper profit. Compare realized gain.

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Unrealized gain. If you own an investment that has increased in value, your gain is unrealized until you sell and take your profit.

In most cases, the value continues to change as long as you own the investment, either increasing your unrealized gain or creating an unrealized loss.

You owe no income or capital gains tax on unrealized gains, sometimes known as paper profits, though you typically compute the value of your investment portfolio based on current -- and unrealized -- values.

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unrealized gain

The current increase in fair market value of a property, which is unrealized because the property has not been sold. Contrast with unrecognized gain, which is a tax concept.

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Unrealized Gain

What Does Unrealized Gain Mean?

A profit that exists only on paper as a result of holding on to an asset rather than actually selling it.

Investopedia explains Unrealized Gain

Let's say an investor owns a stock that has doubled in price but he or she hasn't sold it yet. This is said to be an unrealized gain. The opposite of an unrealized gain is an unrealized loss. Either way, no tax consequences are incurred until the investor actually sells the security.

Related Terms:
• Capital Gain
• Market Order
• Return on Investment
• Stop Order
• Tax Deferred