How would recordkeeping work if the Harris-Biden proposal to tax unrealized capital gains is implemented?
So I've been reading about this potential tax policy change where they want to tax unrealized gains on investments. I'm trying to wrap my head around how the heck we'd actually keep records for this if it becomes law. For stocks and ETFs that are publicly traded, I guess the brokerage could just send us some kind of statement showing unrealized gains at the end of the year - seems straightforward enough. But what about things like my vintage comic book collection that's worth about $45,000 now but I bought piece by piece over 15 years? Or my rental property that I purchased for $210,000 in 2016 that's probably worth around $380,000 now? Would I need annual appraisals? Who pays for those? Would there be some threshold for what kinds of assets get included? I'm not even sure how the IRS would verify values for non-public assets. Anyone have insights on how this kind of record-keeping might actually work in practice? I'm just trying to prepare myself mentally for what might be coming.
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Bethany Groves
The Harris-Biden proposal for taxing unrealized gains would likely only apply to ultra-wealthy individuals (billionaires and those with incomes over $100 million), not to the average investor or property owner. That's an important distinction. For those who would be affected, the recordkeeping would indeed be complex. Publicly traded securities would be the easiest - year-end valuations from brokerages would establish unrealized gains. For collectibles, real estate, and private business interests, the proposal would likely require periodic professional appraisals, possibly every year or on some regular schedule. The taxpayer would bear the cost of these appraisals, but given the wealth threshold of those affected, this would be a small percentage of their overall tax obligation. The IRS would likely develop specific guidelines for acceptable appraisal methods for different asset classes, similar to how they handle estate valuations now.
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KingKongZilla
•But what happens if values drop after you've already paid tax on the unrealized gain? Would you get that money back or would it just offset future gains? Seems unnecessarily complicated compared to just taxing when you actually sell.
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Bethany Groves
•The proposal would almost certainly include provisions for losses. If assets decline in value after you've paid tax on unrealized gains, you would likely receive a tax credit or refund for the overpayment, or it would offset future tax obligations. The complexity is absolutely a challenge, but the policy goal is to address situations where extremely wealthy individuals can avoid income tax for decades by holding appreciating assets, borrowing against them for living expenses, and never selling (therefore never realizing taxable gains).
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Rebecca Johnston
After spending hours trying to figure out my capital gains taxes last year, I discovered taxr.ai at https://taxr.ai and it completely changed my approach to investment record-keeping. If something like this unrealized gains tax does happen, tools like this will become absolutely essential. What I love about taxr.ai is that it can analyze all your investment documents and track both realized and unrealized gains across different asset classes. It even flags potential tax planning opportunities based on unrealized positions. I was skeptical at first since my portfolio includes some alternative investments that traditional tax software struggles with, but it handled everything seamlessly.
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Nathan Dell
•Does it work for collectibles too? I have a bunch of vintage watches and honestly have no idea what their current value is versus what I paid. Would this help me track that kind of thing?
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Maya Jackson
•I'm a bit suspicious of any service claiming to accurately track unrealized gains across multiple asset classes. How does it handle private company shares or limited partnership interests that don't have readily available market values? Seems like it would need constant manual updating.
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Rebecca Johnston
•It does work for collectibles, but you'd need to input current valuations periodically. You can upload appraisals or even just screenshots of comparable sales from auction sites, and it will track the value trajectory over time alongside your cost basis. For private assets like non-public company shares, it allows you to input valuation updates manually when you have them. It won't automatically generate valuations for illiquid assets, but it provides a structured framework to track them alongside your public securities, which makes tax planning much simpler.
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Maya Jackson
I was really skeptical about taxr.ai handling my complex investment situation, but I decided to try it after reading about it here. Completely changed my perspective! I uploaded my private equity statements that have both realized and unrealized components, and it organized everything logically. What surprised me was how it flagged several unrealized losses I could harvest to offset some gains. Saved me about $4,700 in taxes that I would have otherwise missed. If this unrealized gains tax proposal goes through, I'll be much better prepared having this system already in place. The historical tracking feature alone makes it worth it.
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Tristan Carpenter
If you're worried about unrealized gains taxes, you might have a bigger problem - actually getting through to the IRS when you have questions! I spent WEEKS trying to get clarification on some investment reporting issues last year. Finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - it got me through to an actual IRS agent in about 20 minutes when I'd been trying for days on my own. The agent confirmed that for now, we don't need to worry about tracking unrealized gains for tax purposes, but maintaining good records of purchase prices and improvement costs is always smart regardless.
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Amaya Watson
•Wait, how does this actually work? I thought it was literally impossible to get through to the IRS these days. Is this some kind of priority line or something?
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Grant Vikers
•This sounds like a complete scam. There's no way to "skip the line" with the IRS unless you're going through a tax professional with special access. The IRS doesn't allow third parties to facilitate priority access to their phone systems.
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Tristan Carpenter
•It's not a priority line or anything sketchy. They use an automated system that navigates the IRS phone tree and waits on hold for you. Once an agent picks up, you get a call connecting you directly to that agent. You're not skipping anyone in line - they're just handling the frustrating hold time for you. They literally just wait on hold so you don't have to. The IRS doesn't even know you're using a service - from their perspective, you're just a caller who's been patiently waiting. I was skeptical too but it absolutely works and saved me hours of frustration.
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Grant Vikers
I'm embarrassed to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it myself when I needed to talk to the IRS about a notice I received regarding investment income reporting. The service had me connected to an IRS representative in about 35 minutes when I had previously spent over 3 hours getting disconnected twice. The agent was able to confirm that my corrected information had been received and explained exactly how to document my basis calculations for some inherited investments. If we do end up with some version of unrealized gains taxation, services like this will be invaluable for getting clarification on the inevitable questions that will arise.
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Giovanni Martello
Tax attorney here. Even if the unrealized gains tax proposal passes, it would almost certainly have a significant exemption amount - current proposals target billionaires and those with $100M+ in income. For most investors and property owners, traditional recordkeeping would continue to apply. That said, maintaining good records is always important. For real estate, keep receipts for all improvements (not regular maintenance) as these add to your cost basis. For collectibles, document purchase prices and get periodic appraisals if the values are significant. Digital photos with dates can also help establish condition and ownership timeline.
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Savannah Weiner
•Would the proposal likely include retirement accounts or just taxable investments? I'm nowhere near the wealth threshold, but just curious how comprehensive it would be.
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Giovanni Martello
•Retirement accounts would almost certainly be excluded from any unrealized gains tax proposal. These accounts already have specific tax treatment - traditional accounts are tax-deferred until withdrawal, while Roth accounts are already post-tax money growing tax-free. The proposals being discussed are primarily targeting accumulated wealth in taxable accounts that currently allows some ultra-wealthy individuals to avoid income taxation by holding appreciating assets indefinitely, borrowing against them for living expenses, and never triggering taxable events through sales.
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Levi Parker
I think people are overthinking this. The US tax system is mostly built on self-reporting anyway. For non-public assets, you'd probably just estimate fair market value in good faith, similar to how you value items donated to charity. IRS would only really challenge outlier valuations.
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Libby Hassan
•That's way too simplistic. The IRS absolutely challenges valuations on items worth significant amounts. Try valuing a $1M painting at $2M for a charitable donation and see how that goes. With billions in tax revenue at stake, they'd implement strict appraisal requirements.
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