Realized and Unrealized Gains

Investment gain and loss terms covering open positions, realization events, tax recognition, and worthless securities.

Realized and Unrealized Gains terms connect investment results to tax treatment, transaction cost, realized gains, unrealized gains, credits, penalties, and account implementation.

Use this branch when after-tax return, cost basis, distribution type, jurisdiction, account wrapper, or realized-versus-unrealized status changes the analysis.

Key Terms in This Branch

TermUse it for
Realized Gain or LossA gain or loss measured after a sale, settlement, exchange, closing, or other disposition relative to the relevant basis.
Unrealized Gain or LossChange in an asset’s or open position’s value before sale, settlement, or another realization event.
Worthless SecuritiesSecurities with no remaining value and the evidence, timing, accounting, and tax questions that follow.

What to Check

Check the tax jurisdiction, account type, holding period, cost basis, distribution character, realized status, documentation, and whether a professional tax conclusion is required.

Common Mistakes

  • Applying a tax label without checking jurisdiction and account type.
  • Comparing pre-tax and after-tax returns as if they were the same measure.
  • Ignoring cost basis, holding period, realized status, and distribution character.
  • Treating educational tax vocabulary as personalized tax advice.

This page is educational and does not recommend a specific investment strategy, security, tax treatment, or account choice.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.

Realized Gain or Loss

A realized gain or loss arises when an asset or position is sold, settled, exchanged, or otherwise disposed of relative to the relevant basis.

Unrealized Gain or Loss

An unrealized gain or loss is the change in value of an asset or open position before a sale, settlement, or other realization event.

Worthless Securities

A worthless security has no remaining value, but bankruptcy, delisting, or a near-zero price alone may not establish tax worthlessness or its timing.

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