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What is the difference between a “realized” and “unrealized” capital gain?

April 26, 2017Capital gain realized Unrealized

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What is the difference between a “realized” and “unrealized” capital gain?

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Realized capital gains can occur when an investment is actually sold at a profit. Unrealized capital gains occur when an investment appreciates in value but hasn’t yet been sold. Realized gains may be taxable unless investments are held in a tax-advantaged account, such as an IRA or 401(k). Unrealized gains do not incur taxes.