by Recyclersteve » Mon Sep 02, 2024 5:00 pm
The potential for taxes on unrealized gains is a VERY SCARY thought. Let’s take Elon Musk, one of the richest people in the world. I’m gonna make the assumption that he owns a LOT of Tesla (TSLA) stock and has many billions in unrealized gains.
He could easily be forced to sell a bunch of Tesla stock to pay his tax bill. This could cause a huge collapse in the price of Tesla stock. I would say the same for Nvidia (NVDA). Apple (AAPL) and many more. In fact, this could cause the market to collapse.
Let’s take it one step further. Let’s say this is based on a snapshot of stock prices on 12/31 each year. Well, I imagine some enterprising person might tell a few friends to create bad rumors about your own stock (to depress the value temporarily and reduce tax liability).
Accountants everywhere are probably licking their chops just thinking about the added complexity and tax prep revenues.
This one really has got my blood boiling! Even my wife, who doesn’t follow the stock market much at all, thinks this is beyond stupidity.
Former stock broker w/ ~20 yrs. at one company. Spoke with 100k+ people and traded a lot (long, short, options, margin, extended hours, etc.).
NOTE: ANY stocks I discuss, no matter how compelling, carry risk- often
substantial. If not prepared to buy it multiple times in modest amounts without going overboard (assuming nothing really wrong with the company), you need to learn more about the market and managing risk. Also, please research covered calls (options) and selling short as well.