[whamlastxmas]

If you bought your house for $500k 20 years ago, sold it today for a million, then bought it again tomorrow for a million, would you describe that to your friends as having just made $500k? Like yes in the most pedantic technical accounting way it's a gain. In spirit I would call this an unrealized gain

[plaidfuji]

No, you’d remark that your house has appreciated in value over the past 20 years. But you wouldn’t have realized any of that gain until you sold the house - the point being that the realization is the actual taxable event, which is why it matters from the pedantic technical accounting POV. The fact that you turned around and bought another house just means you’re doing something new with your realized gains. Now you have a new cost basis. Maybe that’s what you’re saying with “unrealized gain” though.

[throwaway34903]

Sure in the spirit it's an unrealized gain but wouldn't the tax man consider it a realized $500K capital gain? seemingly this is would be the more appropriate way of categorizing it?

[erikerikson]

No but I read the article and that was the way it described the gain.