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When Should Asset Appreciation Be Taxed?: The Case For A Disposition Standard Of Realization, Jeffrey L. Kwall

Indiana Law Journal

The realization requirement is one of the most basic elements of the United States income tax. Due to this requirement, any increase in the value of a person’s property is not taxed when it occurs. Rather, the tax on asset appreciation is deferred until the occurrence of a realization event; that is, until the property is transferred in exchange for money or other consideration. By contrast, all other forms of income (e.g., salary, rents) are taxed immediately.

The realization requirement is one of the most basic elements of the United States income tax. Due to this requirement, any increase in …