Unrealized Gains
Profit on a cryptocurrency holding that has not yet been sold — also called 'paper gains.'
Explained Simply
Unrealized gains (or paper gains) are the difference between your cost basis and the current market price of crypto you still hold. They are not taxable until you sell, trade, or otherwise dispose of the asset. Unrealized gains can disappear quickly in volatile markets. The distinction between realized and unrealized gains is important for tax planning — you only owe taxes when you realize a gain by selling. Conversely, unrealized losses cannot be claimed as deductions until you sell.
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This content is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for advice specific to your situation.