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Yeah, only if you win. Otherwise there isn’t any value. Do you pay taxes on a pat on the back?

• s1artibartfast 4y ago
  Options and lotto tickets obviously have value. Options cost money to purchase on an stock exchange.
  • api 4y ago
    You’re technically correct. The problem really is that taxing unrealized gains is regressive. The rich can afford to pay these taxes and thus can get and benefit from assets like options. The poor cannot and would therefore be cut out. In a regime where all options are taxed as income less wealthy startup employees for example would be cut out of exit gains. As is usually the case those who want to soak the rich end up soaking the middle class or reducing class mobility while leaving the already rich largely untouched.
    • s1artibartfast 4y ago
      I agree it makes no sense to tax unrealized gains. however, receiving stock itself is a gain. If I gifted you 1000 shares of Apple today, that would be a gain for you. It would also be the basis cost for any future sale. Similarly, if I payed you with 10kg of gold, or a house, or land, it makes sense to tax that transfer event, not just if you sell for cash. In short, it makes sense to test asset transfers, but not appreciation while you hold it. I do agree with a tax deferment for asset transfers where there is no resale market like pre IPO stocks or options. Post IPO is a different story.