paper loss

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

paper loss

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Investors who simply held on to their positions during the flash crash had recovered all or most of their paper losses within about a week.
Still, some in the industry have had a hard time accepting real-dollar losses for natural person credit unions when, so far, everything at the corporates is just paper losses. One CEO suggested that when he started a few decades ago, credit unions were allowed to run in the red if they looked promising.
The silver lining is that you can use investment losses to reduce taxable income so long as you are willing to turn paper losses into real profits and work around IRS offset rules and annual net-loss deductibility limits.
The special account's paper losses will be realized once the ministry begins to unwind its huge holdings by selling dollars at these lower levels in exchange for yen.
In sharp contrast, individual holders frequently keep shares for three to seven years and often hold on to downtrodden stocks in the hopes that they will eventually see their paper losses disappear.
Leaf casting, a more mechanized version of pulp filling of paper losses, involves pulling a slurry of pulp and water through losses in paper with a vacuum pump over a fine screen.
The suits allege that the defendants were involved in damage inflation and paper losses, where bills were submitted for nonexistent damage and repairs, as well as switches of VINs and license plates to conceal past claims using the same cars.
These transactions are channeled through one or more passthrough entities to create paper losses that flow back to individual returns, offsetting income from other sources.
Those companies could not sustain their paper losses and, as a result, began to focus on their core business to sustain profitability.
Paper mills can significantly reduce off color and off shade paper losses by splitting the flow of dyes and fluorescent whiteners.
The New Zealand carrier's share price dropped again on 25 September and it has, along with its two largest shareholders, suffered paper losses of about NZD2.35bn since the collapse of Ansett on 12 September according to The West Australian newspaper.
Of the total losses, 7,132.1 billion yen came from losses connected to retirement and pension-related liabilities, 1,597.1 billion yen in appraisal losses on stocks and other securities holdings, 685.4 billion yen in valuation losses in real estate holdings and 139.4 billion yen in paper losses on golf club membership certificates.