Taxed on Unrealized Gains! What Are They Thinking?
During her confirmation hearing U.S. Treasury Secretary nominee Janet Yellen reportedly said she would consider taxing unrealized capital gains!
Let me tell you it's not a practical plan and could hurt sentiment among investor causing all sorts of Chaos in the financial markets. I hope this does does not happen as I can’t even figure out how the logistics behind this would even work.
Unrealized capital gains refer to the theoretical increase in value of assets that an investor holds onto. The gains are only realized when the investor sells the asset at a price higher than what was initially paid to buy it. To make investors pay tax on something that not only can lose value, but they might not even have the liquid funds to cover a tax” and “imaginary” gains at that point.
For example, you have $50,000 in bitcoin gains under this type of system you get taxed on that $50,000 even if you did not have the Fiat currency to cover that tax. The only thing that you could do at that point would be to sell that bitcoin and realize the gains. My next question would be are they going to tax those realized gains as well?
In a second example, say you have $50,000 in bitcoin gains and you pay your tax on those gains. All the sudden those $50,000 gains get wiped out due to the market moving. Under The system would you be able to get a tax credit if you realize those gains considering you paid a tax on something that is no longer there?
The system boils down to the only way investors can avoid taxation is by not making any profit from their assets realized or unrealized.
Don’t even get me started and how this would work for 401(k)s considering most people would not be able to cover unrealized gains because there’s an in balance between people savings accounts and what they have in retirement accounts.
Posted Using LeoFinance Beta
https://twitter.com/cryptictruth1/status/1352363420365021186
It’s all noise. Bad ideas come and go with most political insiders. Most of the spin is to create a negative narrative. Yet, if they truly want what’s best for society freedom is the only way.
Posted via neoxian.city | The City of Neoxian
This is just to distract from all of the jobs that Biden has lost in his first 1+ days in office. "Look over here at this puppet while this other puppet steals all of your money!"
I think Biden will be better for the economy (stocks) and the people. I think they are testing the waters to see how big business takes to certain comments. I liked Yellen during the Obama era I just think there was a lot of FUD being thrown out right now.
Biden had talked about taxing 401(k)s to pay for universal healthcare. If the economy doesn't tank, it will. Or at least inflation will be the highest we've seen in 4 years.
Gas, Milk, Bread, Cheese... It's all going to cost more... Which means whether you get paid more in salary or not, your going to have less left over for discretionary spending. I can't wait...
We need to tax the ultra rich it’s absurd they hold all the wealth. I'm not worried because I don't make over 400k. Even if I did I don't mind paying my taxes. For perspective I pay $500/month for healthcare so anything less that would be great. If every American paid that it’s like 1.8 trillion.
On the inflation part they can’t print enough money to raise inflation. They have been targeting over 2% and can’t get it to happen...
Yeah, this seems like a really bad idea. Like some of the other comments are saying, I think they just throw all kids of stuff out there to see what will stick. They really don't even know what they are going to do from day to day!
Posted Using LeoFinance Beta
They have always been about the immediate problem without the long thinking. I think Yellen will be good I'm thinking there's a lot of fear mongering going on so small comments like these get blown up. I would not be opposed to taxing the ultra rich but you and I could not afford it if they wanted us to pay taxes on 401k gains each year.
Yeah, no way. I would get killed if they started taxing my unrealized gains. That would just be nuts!
Posted Using LeoFinance Beta
Same I would not have the cash to cover it. At face value that makes me think it's all talk
In Germany we have this since a year or two for funds which are accruing interest instead of paying them out.
Glad I only have dividend paying stocks and funds. Don't want to bother with this...
Really? I have to look into this more. So you pay gains unrealized interest?
You pay taxes on the gains of the funds, even if unrealized, yes. This is calculated yearly by how much the fund has gained over the year. When you sell it, it is supposed to even out by calculating how much you should have payed in taxes compared to how much you actually paid.
It's complicated and feels like giving the government a loan. All funds accruing a certain percentage of their dividends fall under this law. I don't understand how it calculates exactly myself, so I keep out of it. I only buy what pays out instead of accruing the gains and thus the dividends are taxed right away making it easier and more transparent.
This is quite a new thing for us, too. First time unrealized gains are taxed here as far as I know. Was a big headline ~2 years ago but I guess no one cared, as people have a hard time understanding it and the bank takes care of it all.
Funny thing is, they call this rule "steuereinfach" which is German for "tax-easy" explaining that taxes are now easy to calculate as dividends from accruing funds are taxed the same way as if they had been paid out.
It sounds like it's aimed at crypto - but it could just be a distraction tactic.
Posted Using LeoFinance Beta
I think it's all FUD. Honestly feels like everyone is working together to lower prices so they can get in.