paper profit

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

paper profit

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.

paper profit

(1) An increase in the value of real property, so one has a profit on paper even though the property has not been sold.(2) The profit from an income-producing property that has an accounting profit on which the owner has to pay income taxes, but that has a negative cash flow requiring cash infusion from the owner in order to pay bills. This can occur if debt service payments are high, because only the interest portion is a deductible expense, even though the owner must write checks for interest and principal.It can also happen if customers or tenants are not paying their bills on time, so that the receivables are large, or if the property owner must expend large sums of money making upgrades or repairs that must be capitalized rather than written off as expenses.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
If options are in the money, they may be subject to the alternative minimum tax (AMT) on paper profits even before selling their shares.
While that move gave Whitman an immediate eye-popping paper profit of $42.7 million--the difference between her 7 cents a share option price and the proposed IPO stock price of $6--it's a mere fraction of the paper profit she held when eBay's stock price hit $323 later that year.
The PS47,000 paper profit is enough to buy Swede Lundgren more than 1,200 return easyJet flights to Stockholm.
Both banks have been trading at levels that give the taxpayer a theoretical paper profit.
Its 3.9% shares gain saw taxpayers return to a paper profit of more than pounds 1bn on the holding.
Its 3.9 per cent shares gain saw taxpayers return to a paper profit of more than pounds 1 billion on the holding.
Global Banking News-24 August 2009-US government has paper profit of USD11bn from Citigroup stake(C)2009 ENPublishing -
But big money investors who snapped up stock made an PS82million paper profit yesterday after a rise in the bank's share price.
Banks and miners were among those leading gains on the Footsie, with Royal Bank of Scotland up nearly 4% or 1.9p to 55.8p, while Lloyds Banking Group added another 2p to 68.5p - firming the taxpayer's paper profit on its stakes in the banks.
Lloyds Banking Group, in which the taxpayer has a 41% stake, closed 0.7p up at 65.4p - about 2p above the 63.2p entry price for the Government's pounds 27.6bn investment - giving the public sector a notional paper profit of more than pounds 500m.
That gives a notional paper profit of more than pounds 500million.