Yes, the tax is ultimately the same, modulo the time value of money. However, the idea of the realization requirement is that it's not reasonable to tax someone on a gain in the value of property when they don't have liquid assets to pay the tax, or when they haven't realized benefits from that appreciation. Taking a loan against those assets cuts against that, though. And the time value of money does make a difference. Say your stock appreciates $10 this year and stops appreciating. You will ultimately pay taxes on that $10 when you sell it, but if you can borrow against that money now, you can enjoy current benefits from that money while delaying the tax to years in the future when it is worth a lot less.