ExpertGlossary

If you own an investment that has increased in value, your gain is unrealized until you sell and take your profit.

In most cases, the value continues to change as long as you own the investment, either increasing your unrealized gain or creating an unrealized loss.

You owe no income or capital gains tax on unrealized gains, sometimes known as paper profits, though you typically compute the value of your investment portfolio based on current - and unrealized - values.