All profit or losses (sources of income, positive or negative) that have occurred on paper, while respective transactions have not taken place or have not been completed. Such an income has not actually been realized, but it might be yet realized in the future. An unrealized income is not taxable since it only arises from fair valuation (fair market/ fair market value), and also, when a respective item is sold, disposed of, or transferred. For example, unrealized income arising on a stock can be realized when it sold or liquidated.

Realized gains or profits may be considered if an asset is sold, donated or scrapped.

It is also known as unrealized profit or losses.