So if I purchase a home and it's my primary dwelling, and the fair market value of my home goes way up (like more than what my homestead cap is) - I should pay INCOME taxes on this UNREALIZED gain?
See why this is so bonkers.
Don't get me wrong, I'm totally in favor of the super rich to pay more in taxes ... but they are not using any "loop holes" here or getting preferential treatment. It's just that they have radically way more unrealized gains than ordinary people do.
It'd be interesting if all those people who had huge unrealized Bitcoin gains had to start paying ordinary income taxes on it.
> If most of your on-paper net worth is unsellable assets, I don't think it would be much of a stretch to say those wouldn't be subject to a hypothetical wealth tax.
Wouldn't a primary dwelling fall under this umbrella?
A home is a tangible asset easy to sell. Paper shares in a startup is totally different.
It was labelled the Dementia Tax and was deeply unpopular.
Tax law has plenty of examples of various assets having unaccessed value until it's sold. Publicly tradable shares have value because I can sell them to someone for a fairly visible price. If I can't sell it, you could make the argument it's really not worth anything.
AMT also happens plenty to non-startup world people. Own a house and have a combined household income of >200k? You're probably dealing with AMT.