Unrealized Loss: If the market price of a security you own drops below the amount you paid for it, you have an unrealized loss. The loss remains unrealized as long as you don't sell the security while the price is down. In a volatile market, of course, an unrealized loss can become an unrealized gain, and vice versa, at any time. One reason you might choose to sell at a loss, other than needing cash at that moment, is to prevent further losses in a security that seems headed for a still-lower price. You might also sell to create a capital loss, which you could use to offset capital gains.

 

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Unrealized Loss: If the market price of a security you own drops below the amount you paid for it, you have an unrealized loss. The loss remains unrealized as long as you don't sell the security while the pr . . . View Full Definition

Unrealized Gain: 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 investm . . . View Full Definition

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Passive Losses: You have passive losses from businesses in which you aren't an active participant. These include limited partnerships, such as real estate limited partnerships, and other types of activities . . . View Full Definition