4 ms·
I agree, so i think a good analogy would be, you buy a tractor and hold it and for whatever reason that tractor gains value, and you exchange it for a boat next
by SonicSoul 9y ago
I agree, so i think a good analogy would be, you buy a tractor and hold it and for whatever reason that tractor gains value, and you exchange it for a boat next year. At what point do you pay capital gains on that tractor? (it's not a currency, but you're using an asset like a currency)
- cortesoft 9y agoFor most assets, you only pay taxes on the gains when you sell the asset. If you buy stocks, for example, you only pay capital gains if you sell the stock.
- rosser 9y agoIf the tractor sells for more than you paid for it — or, in your specific example, the boat you traded it for is worth a larger number of dollars than you paid for the tractor, at the time of the trade — then yes; that is the very definition of "capital gains". Just because the gain isn't in actual dollars, doesn't mean there wasn't a gain. If the gain is somehow denominable in, or reducible to, a number of dollars, then for tax purposes it is a gain. You realize those gains at the time of the sale or trade. That's when they're taxable.