Taxing realized gains has the obvious advantage that’s there’s no question as to what the value was at the transaction. Unrealized gains have to be estimated/appraised; you get into minority ownership issues as well. (How much would you personally pay for 10% of a business where I control the other 90%? If most of my wealth is tied up in a business I’ve created, given that, how do I reasonably raise the cash to pay the tax on a gain that hasn’t been realized?)

Similar questions for a house that I’ve paid off prior to retiring. It doesn’t make sense to me to have people paying imputed capital gains on some number that Zillow or a government version thereof decides is right.