Yellen Endorses Unrealized Capital Gains Taxes

If this passes, the stock market will tank. If your stock value in Amazon increased from $27 to $3500 in the last twenty years, she wants you to pay taxes on the difference. Even Soviet Russia never did this. Horrible idea.

It would be like this, if you bought a house for 250,000 in 1995 but inflation had made it worth 1.2 million in 2021, you would have to pay tax because of the inflation the government created by printing too much money. Hopefully this never becomes law, you will see money fly overseas, along with many of our entrepreneurs.

Unfortunately the reporting is abysmally poor on this issue. Is this a potentially yearly process? Or is it a change to the step up in basis rule? By that I mean will these unrealized Capital Gains Taxes be incurred upon death or is a yearly accounting to be done?

I spoke with a tax attorney, she said the following:
The proposal "taxing unrealized capital gains" means, for example. If you bought Apple for $100/share in 2000 and it is now worth $2500, you would pay tax on $2400 at whatever the capital gains rate is. The following year if Apple is worth $3000 you would pay tax on the $600 of unrealized capital gain. The proposal at first is to be applicable to only very wealthy, $100 million or more.
However as has been shown, e.g. the AMT (alternative minimum tax) it will soon affect everyone .

The Beatles wrote a song called "Taxman". But government was more greedy than that song suggested. The WSJ has some great articles and editorials about this planned confiscation of unrealized earnings. And a companion piece about how changes in the tax law caused the Savings and Loan crisis.

Here is an explanation of the topic that hits home, (pardon the pun).

This means Yellen wants to tax the increase in value on your home before you’ve sold it, taxing the money you would earn if you sold it even if you haven’t sold it. This would be true of increased valuation on stocks, as well. As Biden has said many times, he doesn’t want to increase taxes on those earning less than $400,000 per year.

thepostmillennial.com/watch-biden-admin-...alized-capital-gains

So what happens if you get taxed on your unrealized gain and then another Democrat gets elected, crashes the economy, and your asset drops in value? Do you then get a refund with interest?

I swear, these idiots do whatever they can to kill the American dream and have no idea how to grow an economy. Yellen is a moron.

Hopefully, the IRS will figure unrealized capital losses as well as unrealized capital gains.

Example: you purchased your home for $200,000 and it is now worth $500,000. You would pay long term capital gains tax @ 20% on the $300,000 of unrealized capital gains, $60,000, tax.
The next year the economy tanks and your property is now worth $200,000. Hopefully the IRS will grant you an unrealized capital loss of $300,000.
Will you get the 60K back? I don't think so. Also where you able to come up with the money to pay the tax without selling the house.

thepostmillennial.com/watch-biden-admin-...alized-capital-gains

www.wsj.com/articles/democrats-tax-plan-...gs-loans-11635180636

I don't know if the wsj.com is behind a firewall. I can cite relevant passages if you are unable to open the articles.

Dream on. Cap gains are taxed in the year taken. I had a large loss years ago and can only take it at 3k$ per year. I will finally get even this year.

ramage wrote: Hopefully, the IRS will figure unrealized capital losses as well as unrealized capital gains.

Example: you purchased your home for $200,000 and it is now worth $500,000. You would pay long term capital gains tax @ 20% on the $300,000 of unrealized capital gains, $60,000, tax.
The next year the economy tanks and your property is now worth $200,000. Hopefully the IRS will grant you an unrealized capital loss of $300,000.
Will you get the 60K back? I don't think so. Also where you able to come up with the money to pay the tax without selling the house.

thepostmillennial.com/watch-biden-admin-...alized-capital-gains

www.wsj.com/articles/democrats-tax-plan-...gs-loans-11635180636

I don't know if the wsj.com is behind a firewall. I can cite relevant passages if you are unable to open the articles.

I have been in your position, i.e., your capital losses exceeded your capital gains. In that instance after matching your capital gains, you are limited to $3000 per year of the remaining capital loss if filing as a married couple, $1500 if solo.

And the way they justify this illegal asset seizure? We are only going after a tiny minority of people with our plans! When income tax was first created, it only hit the one percent too. Sneaky government. What really sucks? The more inflation government creates, the more they can collect in taxes. Meanwhile your CD's are earning one percent in interest.