[Closi]

> a company is worth zero until you sell it, like most assets.

I don’t think that’s quite true - I would say a better definition would be that a company is worth what someone will pay for it, regardless of if you actually sell it or not.

Stocks, piles of gold and cash are just different types of asset all of which have value.

And you have to really tax all of that, otherwise the wealthy will just avoid taxes by being paid in untaxable gold bricks and trade those for purchases rather than dollars.

[leetcrew]

> I would say a better definition would be that a company is worth what someone will pay for it, regardless of if you actually sell it or not.

this is a good definition for someone like me. if I had to liquidate all my assets today, I could easily figure out how much they are worth just by looking at existing bids.

while no less "true", this definition isn't very helpful at scale. warren buffet can't just sell all his berkshire stock by filling orders. depending on the circumstances of the sale, it could either be worth a lot more than n * last price or a lot less.

[basseq]

To clarify, if you were paid in gold, that's still income and you would still be taxed on the fair market value of that gold. It's income that's taxed, not USD.

Same as stock grants: if you're paid in stock, you pay income taxes when that stock is granted, at the market value of that stock.

You aren't taxed on the FMV increase of that stock until you sell it (at which point you're taxed on capital gains).

[bin_bash]

yes but billionaires never sell. They take out loans using their assets as collateral. That way they don't have to report income.

[neosenate]

How are the loans paid back? I could never figure this one out. If they have to sell assets to pay for the loan, don’t they then get taxed at point of sale?

[bin_bash]

They either get terms where they have to make minimal payments if any, and refinance before the due date. Or they take out more loans to make the payments. Eventually they just die and the estate pays it off tax-free.

[mbg721]

That definition works for things like gold bricks or stocks that are purely treated as assets, but it can create some odd outcomes.

In the 90s there were stories of a fan who caught a milestone home-run baseball and because of its sentimental value didn't want to sell it, but had to do so in order to pay the tax bill.

In the extreme case, if I have a child, does that constitute income equal to the price a human-trafficker would be willing to pay for him or her?

[intended]

I mean do we need to sell Apple to know it’s worth money ? The existence of the stock market immediately makes it possible to convert assets into liquidity - something which firms do regularly.