[jjav]

> ANY usage of unrealized gains makes them realized

I don't feel like you're thinking this through.

Can you define (precisely enough to write into the tax code) what is "usage"?

For example, let's say I go to get a second loan for a vacation home. The Uniform Residential Loan Application asks me to list all significant assets. Such as my first house.

Am I "using" the value of my primary home? The second loan is not a lien against the first home, I'm not borrowing anything against it. They are unrelated. But the lender will probably consider my equity there as additional net worth which can be a factor in approving that second loan.