Not exact matches
The most inefficient tax way to create wealth is to have reportable operating earnings, a Going Concern emphasis; while the most efficient tax way to create wealth is to have
unrealized (and, therefore mostly unreported)
appreciation of asset values, a Resource Conversion emphasis.There is a high level of comfort for a buy - and - hold OPMI investor such as Third Avenue, when investing in the equities of companies
which enjoy strong financial positions.
These other things encompass all the activities
which create realized
appreciation,
unrealized appreciation (
which is, of course, generally untaxed and not generally reflected in book value), as well as financing, and refinancing, opportunities.
Given a choice, most businessmen would prefer to create wealth in the most tax - advantaged manner
which means striving for realized
appreciation,
unrealized appreciation, and financing opportunities, rather than having operating, and therefore taxable, earnings.
This increase in
unrealized appreciation is rarely, if ever, reflected in annual income accounts, whether for St. Joe, Tejon Ranch or other companies whose common stocks are in the Fund's portfolio and
which own developable properties.
As a result, the fund's share price,
which is its NAV, will vary and reflect the effects of
unrealized appreciation and depreciation and realized losses and gains.