3 ms·

You can borrow against the gains though so they aren’t exactly unrealized gains either.

• cableshaft 5y ago
  Yeah, borrow as in you have to pay it all back plus an extra percentage. It might be a lower percentage than capital gains, but you better hope the asset keeps appreciating at more than you borrowed + percentage. And then once you pay it back you still have to eventually cash out and pay capital gains tax anyway. Like if I had done that with bitcoin a couple of months ago (and it's possible to do, there's DeFi now), I would have been in some deep shit with the 50% drop recently. It does seem like a bit of a sidestep though, and I'm sure rich people are probably taking advantage of it, so I wouldn't be opposed to some sort of small tax on money gained from loans made against your assets assuming you owned enough of them (like I don't want to hurt small business loans or anyone in the middle class from it), to discourage this practice a bit.