4 ms·

In the US (and most western countries), the difference is not reported as income until you actually sell it. This removes any debate about the value of the as

In the US (and most western countries), the difference is not reported as income until you actually sell it. This removes any debate about the value of the asset.

2Gkashmiri 5y ago
my question stands. why doesnt us tax system recognise accural of income?
- deleted 5y ago
  [deleted]
- bsaul 5y ago
  Because,there’s no income until you actually sell. Imagine someone poor, having bought a small house in a sketchy neighborhood for not much. Imagine this neighborhood now becoming really fancy with hipsters moving in. With your system, the person would have to basically sell his house just to pay taxes on gains that didn’t translate into anything in his real life.
  - newhouseb 5y ago
    In many places in the US (California aside), property taxes are pegged against the assessed value of the home and re-assessed on a regular cadence. So the scenario you paint can definitely happen. The way that property taxes work in California is more similar to Capital Gains in the US where your taxes are based on the sale price (although imposed continually, not just when a transaction occurs). The net effect of this is that you have neighbors with effectively identical homes who pay a full order of magnitude difference in property taxes every year (i.e. 2k vs 20k). [1] [1] https://www.officialdata.org/ca-property-tax/ https://www.officialdata.org/ca-property-tax/
  - 2Gkashmiri 5y ago
    what is wrong with you. when did i talk about a "poor" person. i specifically wrote when you record an amount in your financial statements as your "gain", after close of financial year, there is no uncertanity of what was earned. the actual has happened. why would a regular home owner create his financial statement?
    - zentiggr 5y ago
      You said "accrual of income". Everyone has been trying to clarify to you, that the change in value of an unsold asset is not income, it is not a gain or loss as far as taxes are concerned.
- sidlls 5y ago
  It's not income until its sold. Also, that scheme of taxation just further advantages the very wealthy and discourages investment anyway.
  - 2Gkashmiri 5y ago
    you dont know what accrual is then. good
    - pedrosorio 5y ago
      Reading a couple of sources on capital gains tax in India, it appears to work in the same way as the US (taxed only when you transfer/sell the asset): https://cleartax.in/s/capital-gains-income https://cleartax.in/s/capital-gains-income https://home.kpmg/xx/en/home/insights/2011/12/india-income-tax.html https://home.kpmg/xx/en/home/insights/2011/12/india-income-t...
mytailorisrich 5y ago
Yes, and that's the only sensible way to do it, IMHO. The market value of an asset goes up and down all the time. There is only an actual gain or an actual loss when that asset is sold. That's the appropriate time to tax (and that's also when the person is sure to have the cash to pay any tax since they have just sold the asset!)

In the US (and most western countries), the difference is not reported as income until you actually sell it. This removes any debate about the value of the asset.

2Gkashmiri 5y ago

my question stands. why doesnt us tax system recognise accural of income?

deleted 5y ago
[deleted]
bsaul 5y ago
Because,there’s no income until you actually sell. Imagine someone poor, having bought a small house in a sketchy neighborhood for not much. Imagine this neighborhood now becoming really fancy with hipsters moving in. With your system, the person would have to basically sell his house just to pay taxes on gains that didn’t translate into anything in his real life.
- newhouseb 5y ago
  In many places in the US (California aside), property taxes are pegged against the assessed value of the home and re-assessed on a regular cadence. So the scenario you paint can definitely happen. The way that property taxes work in California is more similar to Capital Gains in the US where your taxes are based on the sale price (although imposed continually, not just when a transaction occurs). The net effect of this is that you have neighbors with effectively identical homes who pay a full order of magnitude difference in property taxes every year (i.e. 2k vs 20k). [1] [1] https://www.officialdata.org/ca-property-tax/ https://www.officialdata.org/ca-property-tax/
- 2Gkashmiri 5y ago
  what is wrong with you. when did i talk about a "poor" person. i specifically wrote when you record an amount in your financial statements as your "gain", after close of financial year, there is no uncertanity of what was earned. the actual has happened. why would a regular home owner create his financial statement?
  - zentiggr 5y ago
    You said "accrual of income". Everyone has been trying to clarify to you, that the change in value of an unsold asset is not income, it is not a gain or loss as far as taxes are concerned.
sidlls 5y ago
It's not income until its sold. Also, that scheme of taxation just further advantages the very wealthy and discourages investment anyway.
- 2Gkashmiri 5y ago
  you dont know what accrual is then. good
  - pedrosorio 5y ago
    Reading a couple of sources on capital gains tax in India, it appears to work in the same way as the US (taxed only when you transfer/sell the asset): https://cleartax.in/s/capital-gains-income https://cleartax.in/s/capital-gains-income https://home.kpmg/xx/en/home/insights/2011/12/india-income-tax.html https://home.kpmg/xx/en/home/insights/2011/12/india-income-t...

mytailorisrich 5y ago

Yes, and that's the only sensible way to do it, IMHO. The market value of an asset goes up and down all the time. There is only an actual gain or an actual loss when that asset is sold. That's the appropriate time to tax (and that's also when the person is sure to have the cash to pay any tax since they have just sold the asset!)