: How is Massachusetts state tax on unrealized capital gains calculated? My state (Massachusetts) imposes a 5.2% tax on unrealized capital gains. [1] I'm trying to understand how this tax is calculated. Here's an example:

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How is Massachusetts state tax on unrealized capital gains calculated?
My state (Massachusetts) imposes a 5.2% tax on unrealized capital gains. [1] I'm trying to understand how this tax is calculated. Here's an example:

John Doe makes ,000 in a given year. Meanwhile, one of his investments — let's say an index fund — accrues ,000 in interest. In Massachusetts, John Doe's taxable income will be ,000 for that year.

Is that correct?

[1] www.mass.gov/dor/all-taxes/income/

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