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.
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.
One person nursing a big paper loss is Carphone Warehouse founder Sir Charles Dunstone.
For clients whose accounts had been debited, BPI will make sure the paper loss will be reversed and automatically be fixed.
50 billion yen a year before, due to a write-off of a large paper loss on its securities holdings.
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.
14billion paper loss for the taxpayer, who still owns 9.
This loss combined with the paper loss on a mutual fund held by the company was reported as the reason for the lower profits.