Do I pay taxes on unrealized capital gains?

[know-know]

My turbo tax federal form shows $33,000 in capital gains.  This must mostly include unrealized gains; gains not harvested.  Are taxes due on unrealized gains?

[Bsch4477]

There is no tax on unrealized capital gains.  The program can only include what you have entered. 

[fanfare]

your 1099-B will not show any unrealized gains.

anything there is a SOLD you executed in 2020 and is either Long Term or Short Term.

[lmsullivan11]

When turbo tax brought over my unrealized capital gains for Wisconsin it shows as income and I have to pay taxes on it.  Is something wrong on my state form?

[JulieS]

It depends on the source of your "unrealized capital gains".

Is this actually long term capital gains distributions from box 2a of your 1099-DIV?

Capital gains distributions are not unrealized gains. They are realized gains from within a mutual fund or company in which you have invested. The gain is passed to you through Form 1099-DIV and it is taxable income to you. 

If your capital gains are the total of your gains from stock transactions plus your box 2a from 1099-DIV, everything is correct. There is no "unrealized" gain.

[lmsullivan11]

This is listed on a1099B form not 1099DIV.

[PatriciaV]

Please clarify which box on your Form 1099-B reports unrealized gains. Generally, TurboTax does not ask for all information on a 1099-B, only what relates to sales.

[lmsullivan11]

It does not say unrealized capital gains.  We sold stocks and then reinvested back into an ira.  We received no cash.

1099B

1d. Proceeds

      Covered securities

      Non covered securities 

1e Cost of other related securities 

These are the only ones that have amounts in them.

[Bsch4477]

If you sold a stock which was not in a retirement account it is a realized gain even if the proceeds were then invested in an IRA. 

[AamilD]

If you sold stocks from a normal brokerage account and then reinvested back into an IRA, then this is a taxable event even if you reinvested the amount in an IRA. Even if you don't receive cash, the gain made on sale of stocks is a taxable event even if you reinvest that amount. However, if these stocks were traded within an IRA, then those earnings would not be taxed now but may be taxed later on depending on the type of an IRA.

[lmsullivan11]

Turbo Tax pulled the form from my Morgan Stanley Account and added the info to my fed and state form.

[lmsullivan11]

So I get taxed now and again later when I sell it?

[Bsch4477]

If you contributed the proceeds to your IRA you would be taxed on withdrawals from the IRA depending on the type of IRA and the rules associated with its withdrawals.