I notice you ignore the collateral on a loan argument that points to just how real these gains are.
His point was these Dividends payments exist due to unrealized gains.
A better example is zero-coupon investors must report a pro-rated portion of interest each year, as income, even though interest hasn’t been paid out. Aka you own a bond and haven’t been paid yet but you still owe money due to the increase in value.
So to be clear simply owning a bond can be a taxable event while stocks are given an interest free loan on their gains.
unknown|3 years ago
[deleted]
AmericanChopper|3 years ago
Retric|3 years ago
His point was these Dividends payments exist due to unrealized gains.
A better example is zero-coupon investors must report a pro-rated portion of interest each year, as income, even though interest hasn’t been paid out. Aka you own a bond and haven’t been paid yet but you still owe money due to the increase in value.
So to be clear simply owning a bond can be a taxable event while stocks are given an interest free loan on their gains.