Mostly wrong. You pay taxes as a percentage of something, as of some time, after modifying that something in some way. Sometimes this means you pay more in taxes than you ever got from the thing you had, or sold, or bought, or whatever. Your searchable terms here are "ISO", "NSO", and "AMT". See also the rules for capital losses in general.
Other times, especially if you're the CEO or a major shareholder in a large corporation with a large lobbying budget, it means you can buy something, make money on it, and as a thank-you from Uncle Sam, actually pay less tax on all your profits than you would have otherwise. Your searchable term here is "NOL".
Isn't it great that we live in a country where the tax law is so fucking broken that all these things are common enough to have their own acronyms? I know I feel privileged, anyway.
Other times, especially if you're the CEO or a major shareholder in a large corporation with a large lobbying budget, it means you can buy something, make money on it, and as a thank-you from Uncle Sam, actually pay less tax on all your profits than you would have otherwise. Your searchable term here is "NOL".
Isn't it great that we live in a country where the tax law is so fucking broken that all these things are common enough to have their own acronyms? I know I feel privileged, anyway.