The Myth of Realization: Mark-to-Market Taxation of Publicly-Traded Securities

Abstract

In the Greco-Roman world, touching right hands as a greeting demonstrated that one was weaponless and contributed to a more convivial atmosphere. In Medieval Europe, warriors grasped the right hand of their adversaries during a truce as a precaution against treachery. Similarly, when greeting a friend, a knight would extend an ungloved right hand as a token of confidence in the peaceful intentions of his comrade. A handshake is still the traditional form of greeting. It continues to denote friendship, or at the least a lack of hostile intent, even though the circumstances in which it arose may no longer be relevant.
Like the handshake, legal rules and concepts ofttimes survive the situations that fostered their adoption. Originally developed as means to contend with certain conditions, they can acquire a life of their own and be applied, out of habit or inertia, even where there is no justification for their existence. However, unlike the innocuous handshake, blindly applying rules and concepts in situations other than those with which they were developed to contend can be counterproductive.