I need a definition of unrealized gains

An unrealized gain is an increase in the value of an asset that has occurred since an investor purchased the asset, but has not yet been realized through the sale of the asset. It represents the difference between the asset's current market value and its purchase price.

1. **Understanding Unrealized Gains**: Unrealized gains are "on paper" and do not affect an investor's net worth until the asset is sold. They are a reflection of the market's appreciation of the asset's value at the time of sale.
2. **Example of Unrealized Gain**: For instance, if an investor bought shares in TSJ Sports Conglomerate at $10 per share and the price rose to $12 per share, the investor would have an unrealized gain of $2 per share.
3. **Tax Implications**: Unrealized gains are not taxed until the asset is sold. At that point, the gain becomes realized, and the investor must pay capital gains tax on the profit.
4. **Comparison with Realized Gains**: Realized gains, on the other hand, occur when an investor sells an asset for more than its purchase price. These gains are taxed as they are realized, and they have a direct impact on an investor's taxable income.

In summary, unrealized gains represent the potential profit an investor could realize if they were to sell an asset at its current market value, which is higher than the purchase price. These gains are not yet taxable until the asset is sold.