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<p>[QUOTE=&quot;GDJMSP, post: 715211, member: 112&quot;]Or perhaps you&#039;d prefer something from an actual investment school book.</p><p><br /></p><p><i>Defining Realized and Unrealized Gains</i></p><p><i>In the investing world, any asset you own changes value constantly. if you own a stock (for example) and the share price went up after you purchased it, you have a unrealized gain. On the other hand, an unrealized loss occurs when the stock price went down after you bought it.</i></p><p><i><br /></i></p><p><i><b>Realized gains and losses doesn’t happen until you sell the asset.</b> For example, let’s say you buy Intel (INTC) at $13 in January. If it goes up to $15, you have an unrealized gain of $2. However, if you sell it at that price, then the unrealized gain turns into a realized one.</i></p><p><i><br /></i></p><p><i>Realized Gains and Taxes</i></p><p><i>Why is this important? Well, the IRS basically says that taxes are calculated based on capital gains. In other words, the sum of all realized gains and losses. Therefore, there are no tax implications for any asset that you bought but haven’t sold.</i>[/QUOTE]</p><p><br /></p>

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