> Forcing people to mark-to-market? For liquid investments that have a well-agreed-upon market value, that wouldn't be a problem above a moderate wealth thresh

> Forcing people to mark-to-market? For liquid investments that have a well-agreed-upon market value, that wouldn't be a problem above a moderate wealth threshold. In particular, it should be easy to obtain credit against these securities (if necessary/desired) to pay the tax bill. The loans would be very secure, since by definition they would have appreciated more than the taxes owing. And if the current offsetting-loss notions are retained (e.g. losses can be carried back to offset prior gains), if the securities fall in value then the taxes paid would be refunded, providing another way to repay the loan. In the meantime, you'd avoid a current inefficiency of the tax system that encourages people to hold on to subpar or undesirable investments to avoid realizing taxable gains. The entire cottage industry of deciding which investments are "tax efficient" and should be held in taxable versus tax-sheltered accounts should go away.