paper loss


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Related to paper loss: paper profit, Paper gain

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 ?
Net profit will likely remain weak in 2012 due to paper loss from assets divestment and goodwill depreciation.
stock, which is then sold at an inflated paper loss, despite no actual economic loss having occurred.
By taking a large paper loss on a stock or a mutual fund right away, an investor can build up a "bank" of tax losses that can be used to offset future gains.
The paper loss includes about 1 billion yen on domestic bank stocks.
The vast majority of our shareholders would have realized an immediate, paper loss of 30 percent or more on their initial investment had we accepted Citizens' proposal," Priddle said.
However, he was left sitting on a small paper loss after Morrisons' share price dipped 1.
He indirectly owns 22 per cent of the firm and has been left sitting on a PS28million paper loss.
Lloyds has escaped much of the recent wrath, but it has been heavily involved in the mis-selling of payment protection insurance and despite a doubling of its share price last year, at just under 55p, taxpayers are still sitting on a large paper loss.
50 billion yen a year before, due to a write-off of a large paper loss on its securities holdings.
With 675 million shares outstanding, the decline represented a paper loss of $3.
In fact, even if the value of the fund has dropped since your investment--in other words, you're holding a paper loss in the fund--you still have to pay taxes on realized gains distributed to you.
This loss includes a paper loss charge of $173,000 for imputed dividends in relation to a Series B Preferred Share conversion.