You get taxed on sale as well (as I understand it). I think the issue is that you are purchasing something at a price considered below market value so your est

You get taxed on sale as well (as I understand it). I think the issue is that you are purchasing something at a price considered below market value so your estimated net worth changes. Edit: FTR I think just taxing on sale for the entire realized gain would make sense to me as well...but I imagine this policy is to try and prevent high income individuals from dodging income tax by taking all their compensation in stock.