Perhaps the BEST B1G Forum anywhere, here at College Football Fan Site, CFB51!!!

I mean, I understand the mechanics of it.

I just don't agree that you can treat an unrealized gain the same as a realized gain.

I understand the energy behind the effort, trying to find some way to get the "rich" to pay "their share." 

But there are lot of reasons why past attempts like this, simply haven't worked out.

Oh, ok. I thought you were asking for an explanation of how it would work mechanically.

Fwiw: I wasn't advocating for it, I was just explaining how the mechanics would probably work.

I'll add some problems that would make it VERY difficult to implement:

• There currently is NO wealth reporting in Federal Income Tax so this would be completely new to the IRS, the taxpayers, and the tax preparers.
• Even with @847badgerfan 's $10M floor, you'd realistically have to have EVERYONE report wealth because otherwise how would you know who had major gains? Some people with MASSIVE gains might have little or no taxable income so you'd have to check everyone.
• This seems pretty simple if your assets are publicly traded stocks and it is. In that case you just add up shares, multiply by price and viola, value. It is SUBSTANTIALLY more complicated if you own a business or land or mineral rights or patents or basically anything that isn't publicly traded. Then you have to come up with valuations and those are inherently subjective.
• How would a floor such as proposed by 847 apply? Would the floor be per year across all assets or per asset across all years? Per asset would be easily manipulated because if I was doing your taxes and you owned a business I'd advise you to split it up. Put the Real Property in one LLC, put the patents in another LLC, put the local operations in a Texas LLC, put the rest of the domestic operations in an Oklahoma LLC, put the international operations in a Louisiana LLC, etc.

Also a $10M/year floor would be pretty manipulable too.  Let's say @utee94 owned a business that was worth $80M at the beginning of 2018 and the value grew by 10% per year.  Based on that, and using @847badgerfan 's $10M floor, his taxable unrealized gain per year would be: 


But if he had me doing his taxes we'd assert that the value grew by $10M/year instead of 10% per year.  This WOULDN"T be illegal because when I said "value grew by 10% per year", that is an ESTIMATE.  This isn't a publicly traded stock where the value is a known quantity, it is a privately held business where the value is an estimate and even an honest appraiser (assuming such a thing exists) would give you a range. So instead he would report:

Viola, I just saved Utee the taxes on $9.5M in unrealized gains and the IRS would have a VERY difficult time disputing it because even at the end of 2024 the value I am reporting is within +/-4% of the "correct" value.  That would EASILY be within the range of the appraiser's estimate. 

I think we'd see a lot of smaller companies going private.  Their value would be impossible to assess.

True because when your stock price goes up you are stuck. The value is a known quantity and you HAVE to report it. If the company is private, the value is an estimate. 

I don't know why everyone is focusing on Bezos. He's not even the CEO any more. Not for the last 3 years.

Just a figurehead everyone knows as an example.  This is an instance where I don't take the time to type out that he's not the CEO anymore and blah blah blah.

If it was treated like Capital Gains/Losses are now you'd get a capped deduction that you could carry forward (or backward) for a set period of time.

Exapmle (ignoring @847badgerfan 's $10M floor):
You have $150k in unrealized capital gain in 2023 that you have to pay tax on.

You have a $250k unrealized capital loss in 2024. You can:

• Carry $175k back to 2023 and file an amended 2023 return with $25k in unrealized LOSS instead of $150k in unrealized gain, then
• Take a $25k deduction in 2024. You have now used up $200k of your $250k loss and you continue to carry it forward to either offset gains or take a $25k/year deduction.

This is how I have been doing it for years.

Any rule you put in would be worked around and massaged and become irrelevant because these people can buy lawyers and accountants that find and invent loopholes.

The people who least need every last cent are the only ones who get it.  

Yeah, and then let's say, for example, that you're a real estate mogul. Would you not be incentivized to value your property at a certain [low] level for the tax man, but then perhaps value it at higher levels if you're trying to use it as collateral for loans or something? It's all subjective valuation until it is sold, right?

Not that anyone would do such a thing, of course. That would be fraud.

Oh please, it isn't "fraud" it is puffing.   

Besides:

Speaking as a banker- any real estate used as collateral and the loan will be evaluated by the bank.    Not the owner. 

Banks aren't trusting the owner's estimated value anyway.  

If you lied to the bank about income, that would be fraud but even there it would almost always be murkier than that.