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Mr. Yen, In general, gains and losses are realized when an investment is disposed of, and are considered unrealized so long as the property is held. However, there are situations in which gain or loss may be realized with respect to property that has not been disposed of, or gain or loss that is realized on the disposition of property is nevertheless not recognized for tax purposes. Your question reveals a normal, healthy lack of tax knowledge that leads me to suggest you consult a tax advisor before the end of the year and before you find yourself in the normal, unhealthy situation of having filed inaccurate returns! Good luck. Alan Cathcart International Tax Solutions Comments on tax topics are not intended to be relied upon as professional advice.  Taxpayers should always consult their professional tax advisors for definitive guidance.

Can somebody tell me what is Unrealized Captial Gain compare with Realized Capital Gain? (say, about stocks). A realized capital gain occurs when you sell something for more than you paid for it.  An unrealized capital gain is when you own something whose current value is more than you paid for it

Can somebody tell me what is Unrealized Captial Gain compare with Realized Capital Gain? (say, about stocks). I don't want to pay penalty fee to IRS for tax I owe. Nor I am sure if I have gain/lose close to the end of the year. How should I setup my tax withholding? You don't need to make any changes to your withholding unless you realize a gain/loss.  You realize a gain/loss by selling a stock.  So unless you're planning on selling a stock between now and Dec. 31st (or have already this year), I don't believe you have to make any changes to your withholding to cover any gains. Until the stock is sold, you have an unrealized gain or loss. Leigh in raLeigh

I don't want to pay penalty fee to IRS for tax I owe. Nor I am sure if I have gain/lose close to the end of Unless you sold the asset you do not have a reportable gain or loss and therefore it has no effect on your taxes.  Do note that if the asset in question is a mutual fund, it must distribute out realized capital gains from the trades it made during the course of the year. You will have to pay tax on these distributions.

Can somebody tell me what is Unrealized Captial Gain compare with Realized Capital Gain? (say, about stocks). An unrealized capital gain (or loss) is what is colloquially referred to as a paper gain (or loss). The gain (or loss) is then realized when the asset is sold.  It is only at that point the gain becomes income that you have to pay tax on. One of the interesting items in the new tax code has to do with the reduced 18% / 5-year very-long-term gains. Starting in years after 2000, stock purchased after 2000 and held 5 years get very-long-term capital gains treatment. The authors of the bill asked:  But what if someone owns a stock and likes the stock and really doesn't want to have to sell it and buy it back to meet the 'purchased after 2000' requirement? The answer is:   The new law allows you to recognize your capital gains (not losses) on your unsold stock. At least they didn't call this the tax simpification Act of 97.   - posted and emailed -