What is Tax on Unrealized Gain?

What is Unrealized Gain?

The increase in the value of an asset that has not yet been sold. Essentially, it represents a paper profit, as the gain has not been realized through an actual transaction. E.g., suppose you bought an asset for $1,000 and its current value is $1,500. The $500 increase in value represents an unrealized gain.

What is Tax on Unrealized Gain?

The estimated tax liability expected to result from the liquidation or sale of an asset.

In the above example, if you were to sell the asset at its current price of $1,500, the $500 unrealized gain would transform into a realized gain, potentially resulting in a tax obligation of ~$150. Effectively making the asset’s net value as $1,350.

Tax on unrealized gains represents an approximate figure that provides insight into potential tax liabilities and the impact on your net worth if you were to liquidate your assets.

Go to the Asset details > Assorted tab > to manage this.

How do I change the default tax rate?

On the dashboard, click on the Tax on Unrealized Gains number > A popup opens showing the break up > Click on the setting icon on the top right > Change the default tax rate.

Can the cost basis inputs in 'Returns' and 'Tax on Unrealized Gains" be different?

Yes. The Cost basis on the 'Tax on Unrealized Gain' section inherits the number from 'Returns' by default, but you can enter a different cost basis for the tax calculation and it wont mess up your Returns. The cost basis in the Returns will be retained.