Tax deferral option(redirected from Tax Deferral Options)
Tax deferral option
Tax Deferral Option
The right of a taxpayer to refrain from paying capital gains tax on the price appreciation of an asset until he/she has locked in that appreciation by selling the asset. Suppose one bought a stock at $5 and its price is currently $15. Theoretically, the person owes capital gains tax on the extra $10, but the tax deferral option means that he/she will not have to pay until he/she sells the stock.