If a company goes private, does it still count as a capital gain/loss?
does it still count as a capital gain or loss? Yes. Is it essentially treated like you sold the stock at the price of the buy-out?  Yes. Do you still get a 1099-B from your broker? Yes.
A public company should have a link for investor relations, which should help provide a trail of basis if this is a matter of company buyout, takeover, etc.  This gets you close, but if you don't have an exact date, it will just be close, not exact.  One clean way out of this, assuming the goal is to get rid of the stock and move on, is to donate the shares to charity. You will take the present value as a deduction, and be done. You can use a charitable gift fund such as those offered by Schwab or Fidelity, so if say, the shares are worth $20K, and you typically donate $5K per year, the fund lets you do this transaction at once, then send to the charities you wish over the next few years. "Yes, you can do that, but you have to have the stocks issued in your name (stocks that you're holding through your broker are issued in ""street name"" to your broker). If you have a physical stock certificate issued in your name - you just endorse it like you would endorse a check and transfer the ownership. If the stocks don't physically exist - you let the stock registrar know that the ownership has been transferred to someone else. As to the price - the company doesn't care much about the price of private sales, but the taxing agency will. In the US, for example, you report such a transaction as either a gift (IRS form 709), if the transaction was at a price significantly lower than the FMV (or significantly higher, on the other end), or a sale (IRS form 1040, schedule D) if the transaction was at FMV." Since the 2 existing answers addressed the question as asked. Let me offer a warning. You have 10,000 options at $1. You've worked four years and the options are vested. The stock is worth $101 when you get a job offer (at another company) which you accept. So you put up $10k and buy the shares. At this moment, you put up $10K for stock worth $1.01M, a $1M profit and ordinary income.  You got out of the company just in time. For whatever reason, the stock drops to $21 and at tax time you realize the $1M gain was ordinary income, but now the $800k loss is a capital loss, limited to $3000/yr above capital gains. In other words you have $210k worth of stock but a tax bill on $1M.  This is not a contrived story, but a common one from the dotcon bubble. It's a warning that 'buy and hold' has the potential to blow up in your face, even if the shares you buy retain some value. A company typically goes public in order to bring in additional capital. In an IPO, the company (through its officials) will typically do so by issuing additional shares, and offering to sell those to investors. If they did not do that, then there would be no net capital gain for the company; if person A sells share in company C to person B, then company C does not benefit directly from the exchange. By issuing and selling additional shares, the total value of all stock in the company can increase. Being publicly traded also greatly increases the confidence in the valuation of the company, as a consequence of the perfect market theory. There is nothing in this that says that initial investors (cofounders, employees, etc.) need to sell their shares in the process. They might choose to do so, or they might not; or they might be prevented from doing so by terms of any agreements that they have signed or by insider trading laws. Compare What happens to internal stock when a company goes public? Depending on specifics, it might be reasonable for the company to perform a share split prior to the initial public offering. That, however, doesn't affect the total value of the shares, only the price per share. If you take the profit or loss next year, it counts on next year's taxes.  There's no profit or loss until that happens. How you are taxed will depend on what kind of stock awards they are. The value will be determined by the company that issues it, and appropriate tax forms will be sent to you to include with your taxes. The way the value is determined is an accounting question that is off-topic here, but the value will be stated on your stock award paperwork. If you are awarded the stock directly then that value will be taxed as ordinary income. If you are awarded options, then you can purchase the stock to start the clock on long-term capital gains, but you will not incur any tax liability through the initial purchase.  If the company is sold privately and you have held the stock for over 1 year, then yes, it will be taxed as a long-term capital gain. If you receive/exercise the stock less than 1 year before such an acquisition, then it will be considered a short-term capital gain and will be taxed as ordinary income. It just had less cash. That doesn't necessarily mean that the company had a net loss for the year. Just like having more cash doesn't mean the company made a profit.   What if a company had revenue of $1 million, expenses of $2 million, and took out a loan of $5 million? They had a net loss of $1 million, but they have $4 million more in cash. If you make money in currency speculation (as in your example), that is a capital gain. A more complicated example is if you were to buy and then sell stocks on the mexican stock exchange.  Your capital gain (or loss) would be the difference in value in US dollars of your stocks accounting for varying exchange rates.  It's possible for the stocks to go down and for you to still have a capital gain, and vice versa. "Of course, but that's not relevant to my example. Let me clarify: say you hold a highly-appreciated $10M position in AAPL and you have good reason to believe the next iPhone is going to be a flop, causing the stock to decline 20%. You can sell now to avoid the (probable) decline, but by doing so you will be left with, let's say, $6.67M after paying $3.33M of state and federal LTCG taxes on the appreciation ($9M of the $10M, because you bought a long time ago).  However, by simply doing nothing and ""eating"" the 20% decline, you'll end up with $8M instead of $6.67M.  Many economists would criticize the tax in this example, as it has led to the investor rationally suffering a $2M loss, instead of reallocating all $10M of his/her capital to a more promising enterprise. Furthermore, if/when many investors act that way, they can create inefficiency in the equity markets (prices not declining by as much as they should to reflect a firm's reduced prospects)." Sale of a stock creates a capital gain. It can be offset with losses, up to $3000 more than the gains. It can be deferred when held within a retirement account.  When you gift appreciated stock, the basis follows. So when I gifted my daughter's trust shares, there was still tax due upon sale. The kiddy tax helped reduce but not eliminate it. And there was no quotes around ownership. The money is gone, her account is for college.  No 1031 exchange exists for stock. "Summary of accepted answer: Your ""loss"" will not count as a loss (to the IRS).  Which means no tax deduction for a ""short-term capital loss"" (on that sale). Instead, the IRS simply pretends like you had paid less for the stock to begin with." You are correct. She cannot claim the initial loss of $1,000 on her taxes, she can only report the $500 profit. However, the IRS does allow her to add the $1,000 loss to the basis cost of her replacement shares. e.g. No, just as the profits from the bank do not go to their personal accounts and instead go to the banks coffers, where they are paid out as a dividend.   If your company makes a mistake and loses money, do they draw it from your account? this is not necessarily true. sometimes it makes sense for a public company to go private. usually a private equity firm will buy up the shares. the private equity firm would usually be financed by a bank and the cash flow from the company will help pay off the financing. there are pros and cons to both private and public companies. a pro for a private company is the reduced regulation and there is no need to follow sarbanes-oxley act. The business and investment would be shown on separate parts of the tax return. (An exception to this is where an investment is related and part of your business, such as futures trading on business products)  On the business side of it, you would show the transfer to the stocks as a draw from the business, the amount transferred would then be the cost base of the investment.  For taxes, you only have to report gains or losses on investments.